Bidder v Department of Natural Resources, Mines and Energy
[2004] QLC 27
•7 April 2004
LAND COURT OF QUEENSLAND
CITATION: Bidder v Department of Natural Resources, Mines and Energy [2004] QLC 0027 PARTIES: Norman Raymond and Thelma Bidder
(appellants)v. Chief Executive, Department of Natural Resources, Mines and Energy
(respondent)FILE NO: AV2002/0069 DIVISION: Land Court of Queensland PROCEEDING: Appeal against Unimproved Value -Valuation of Land Act 1944 DELIVERED ON: 7 April 2004 DELIVERED AT: Brisbane HEARD AT: Coolangatta MEMBER Mr RP Scott ORDER: The appeal is dismissed and the valuation of the Chief Executive is affirmed. CATCHWORDS: Statutory Valuations - Valuation of Land Act 1944 - Comparison with lightly improved sales - All points of comparison to be considered. APPEARANCES: Mr NR Bidder for the appellants
Mr GJ Smith, Senior Legal Officer for the respondent
Pursuant to the provisions of the Valuation of Land Act 1944 (the Act) the Chief Executive placed an unimproved value on land owned by the appellants in the amount of $242,500 as at a relevant date of 1 October 2001. The appellants contend that the value ought to be $180,000 and, accordingly, appealed to this Court.
Norman Raymond Bidder appeared for and gave evidence on behalf of the appellants. He had been a Chartered Surveyor in the United Kingdom, where he practised as such for four years before coming to Australia. He has worked in the real estate industry in Australia, first in a sales role and then in management. He is a Fellow of the Real Estate Institute of Australia and has an overall 36 years in real estate. He has during that time carried out valuations for two substantial clients of his employing firm, though did not perform valuation work for the public at large.
Derek Rodney Bale, a registered valuer, provided valuation evidence on behalf of the Chief Executive. He was not the valuer who struck the original valuation against which the appellants appealed, however he has maintained the original figure.
The grounds of appeal are:
"Odd shaped block. Narrow frontage on a bend in road. We paid over valuation when we purchased this property. I will try to obtain sales of similar blocks in this area."
The Act provides in s.45(3) and (4):
" (3) An appeal shall be instituted by filing a notice of appeal in the Land Court registry.
(4) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner."
It is clear from the above provisions that the appellants are confined to their grounds of appeal and that in discharging those grounds they bear the onus of proof. I should also for the benefit of the appellants draw attention to s.33 of the Act which provides:
"Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered."
The property which is the subject of this valuation appeal is located at 8 Santabelle Crescent, Clear Island Waters, in the local government area of the Gold Coast City Council. The land is described as Lot 314 on Registered Plan 231166 and suffers no encumbrances on the title that would unduly affect the valuation of the land. The subject property has an area of 898 m².
The property is in a prestigious development where many substantial homes are to be found. Part of the attraction lies in the large constructed waterway described by Mr Bidder as a lake and which properties such as the subject adjoin and overlook. Certainly the waterway merits a description different from that of "canal", a term which connotes a relatively narrow waterway across which residents take in a view which can sometimes be dominated by the backyards of properties on the opposite side.
Access to the subject land is gained by Santabelle Crescent, a two-lane bitumen sealed carriageway with concrete kerb and channelling. Whilst Mr Bale described the access as "good" - and certainly there is no physical difficulty in obtaining access to and egress from the subject land - Mr Bidder raised some concerns about Santabelle Crescent which I deal with below.
The usual utility services are provided to the subject land, which is zoned "Residential A" under the prevailing planning scheme. The property has been developed by the construction of a single dwelling-house which is occupied by the appellants. Both the Chief Executive and the appellants approach their valuations on the basis that that usage represented the highest and best use of the land.
The land has a boundary to the street of approximately 16.79 metres, a depth of about 44.224 metres and enjoys frontage to the lake of 24.86 metres. It will be understood from those dimensions that the land comprises a slightly irregular fan-shaped allotment. It is level in topography and has a south-east aspect to the water.
Whilst on the topic of outlook, I might conveniently mention at this point that Mr Bale provided a series of five photographs which he said were taken from the waterfrontage of the subject land, depicting the nature of the views from that position. He provided a sketch said to indicate the position from which each photo was taken and the direction of the camera lens.
Mr Bidder cross-examined Mr Bale vigorously with respect to the sketch, challenging the accuracy of what it purported to represent with respect to one photo, in particular. At the invitation of the parties, I inspected the subject land and took a view of three sale properties relied upon by Mr Bale and which I detail below. These inspections assisted me in my understanding of the evidence and suitably disposed of the issue as to the accuracy or otherwise of Mr Bale's sketch.
As Santabelle Crescent tracks past the subject land it curves from a southerly direction to south-westerly, in broad terms. I estimate the centre line to have curved by about 60 degrees from its original southerly track. The subject land is located on the outside of this curve, a little west of its centre point. The curve is gradual on that side of the road, taking in the frontage of three lots, one of which has a narrow battle-axe frontage. The inside of the curve is, naturally, comparatively sharper.
Santabelle Crescent joins a distributor road, Santa Cruz Boulevard in two places, one to the east and one to the west and appears on a map somewhat like an anabranch to a river.
The crescent is, as I related above, a sealed road designed to provide access to lots which front it. It is a two-carriageway street without line marking and with no segregated parking area. The road reserve includes a separate unsealed area on each side, apparently for pedestrian usage. Mr Bidder said, however, that as much of this part of the reserve is vegetated with grass shrubbery and trees, pedestrians tend to walk on the road. He referred to the "footpath" area as a nature strip.
Mr Bidder said that vehicles often use the nature strip area or part of it for parking purposes. Whilst he made no specific complaint about that, he did say that because of the narrow carriageway it is difficult to exit the subject driveway safely when one or more vehicles are parked near the driveway exit or on the other side of the road. Often Mr Bidder's wife has to provide him with directions from outside the vehicle when he is attempting to drive out of his driveway. I was not provided with a measured width of Santabelle Crescent, however my inspection afforded me an appreciation of its practical dimensions.
Mr Bidder said that the often difficult exercise in exiting the subject property is made more perilous by the road curvature near the subject which creates a blind bend. He said that the difficult exiting manoeuvre is experienced on one out of each three attempts to drive out of the property. That feature of the property cannot be considered in vacuo but needs to be taken into account in the valuation process, that is, in the comparison with sales.
Mr Bale employed the method of valuation referred to by him as "direct comparison of sales evidence to subject".
His Sale 1 at 68 Montevideo Drive, Clear Island Waters, was transacted on 13 February 2001 for a price of $265,000. From that price Mr Bale deducted site improvements at $22,828 to yield an analysed price of $242,172 which the Chief Executive applied at $240,000 in the statutory valuation of the sale property.
The Sale 1 land has an area of 1,069 m², is a regular fan-shaped level inside waterfront allotment with south-west aspect to the water. It has a water frontage of approximately 31.3 metres, with views over the adjoining waterway towards Robina Parkway, together with its vegetated surrounds, then beyond to the hinterland mountains.
In his comparison Mr Bale said that the sale land is inferior to the subject given its more westerly aspect, its outlook over a narrower expanse of water than the subject enjoys and both the visual and noise impacts of the semi-arterial road. He said also that the sale is considered superior with respect to its longer frontage to water and its larger area. On an overall basis he concluded that the sale land is slightly inferior to the subject property.
Mr Bidder noted the sale land's larger area and added the observation that it would experience less passing traffic than would the subject. I accept that that would be so given its location in a cul-de-sac.
He expressed the views that the outlook from the sale land was superior to that from the subject, given that buildings would not be constructed to impinge upon the views. In comparison the subject land overlooks its adjoining waterway towards houses for much of the compass of the view. I understand Mr bidder's point, however the water aspect from the subject land is most attractive, providing varying depths of view in which houses on the opposite side of the lake do not ungraciously intrude. I think it needs also to be taken into account that the view from the sale land includes the Robina Parkway as an unattractive feature and is westerly in aspect: the least preferred in the marketplace. In the case of the sale property the afternoon sun would reflect viciously off the water.
Mr Bidder also said that on the sale land the occupants would not experience noise from neighbours entertaining there. I take it that he was referring to such noise travelling across the water from its western side where, as I have indicated, there are no houses. Otherwise, the houses located near the sale property in Montevideo Drive would, presumably, generate similar noise levels to the neighbours of the subject land.
Mr Bidder gave evidence that the sale land would experience no noise from Robina Parkway. The occupants of a house there told him that and the advice to him accords with his own experience. He said that the parkway was located the equivalent of 20 lots away. The parties did not strongly join issue on this point. During my inspection I noted a low noise level from Robina Parkway, however understood how that could be adequately screened out inside a residence.
I notice that the Sale 1 property is located on the outside of a curve in Montevideo Drive, but that the curve is slightly less acute than that found near the subject property. Presumably a driver attempting to exit the sale property would, on occasions, experience similar difficulties to those described by Mr Bidder with respect to the subject land. I notice also that nature strips rather than paved footpaths are employed on Montevideo Drive.
Mr Bale's Sale 2 is at 3 St Martin Place, Clear Island Waters, has an area of 855 m² and sold on 9 May 2001 for $300,000. Mr Bale deducted site improvements in the amount of $15,060 to produce an analysed price of $284,940, which was applied at $260,000.
Mr Bale described the sale land as an irregular fan-shaped level inside waterfront allotment with northerly aspect to the water. The sale land has a narrow water frontage of approximately 14 metres with views over what he described as "an above average expanse of water to Boobegan Creek".
Mr Bale considered the sale to be inferior to the subject in its narrow frontage to water, its outlook over a narrower expanse of water and the overall site area. He said, however, that the sale property is superior to the subject in its northerly aspect to the water and considered it to be overall superior.
St Martin Place is found at the western end of Santa Cruz Boulevard just past the western junction of the boulevard and Santabelle Crescent. St Martin Place is a cul-de-sac with a road width narrower than Santabelle Crescent, as I observed it, though the road surface of St Martin Place is made of individually laid pavers. This provides the street with an advantage in prestige over Santabelle Crescent, according to Mr Bidder. Whilst the sale property is not located in a curve in the road, I would think that vehicles exiting the land would need to exhibit a level of care similar to one exiting the subject land. I note that St Martin Place is similar to Santabelle Crescent in not having constructed footpaths, but in continuing the nature strip theme.
Mr Bidder and Mr Bale agree that Sale 2 is overall superior to the subject land. Mr Bidder put that superiority at a higher level, however, saying that the house on the sale property is much more expensive than the one owned by the appellants, though I observe that he did not say that a house of that standard would not be built on the subject land by a prudent person. It must be borne in mind that in accordance with the provisions of s.3 of the Act the valuation under consideration is to be considered on an unimproved basis and the sales viewed accordingly.
The Sale 2 property is near the lock gate to the Nerang River - an advantage for those with boats, according to Mr Bidder.
Mr Bale's description of the outlook of the sale property fails to adequately describe the view which takes in a golf course on the opposite side of the water, though includes houses within the range of view. What can be seen is therefore more attractive than that of a purely built environment.
The narrower water aspect from the sale land was characterised as a virtue by Mr Bidder who said that the property had the benefit of a basin protected on three sides from prevailing winds. That would be perceived as a benefit by a boating enthusiast, in his opinion.
He continued the boating theme by saying that he did not accept that the 14-metre water frontage of the sale property was a point of inferiority when compared with the subject at 24.86 metres. He said that the maximum boat size that was able to traverse the canal lock was 40 feet, so there was no real benefit in having a longer frontage than the marina berth that one would construct at the sale land.
I think that Mr Bidder was wearing his real estate selling hat on occasions and especially with respect to the question of the 14-metre waterfrontage of the sale land and its aspect over a narrower expanse of water. I think that the broader market would see these features as points of inferiority in the comparison with the subject property.
The third sale in Mr Bale's valuation was of a 929 m² property at 90 Santa Cruz Boulevard, Clear Island Waters. The sale took place on 23 February 2001 for a sale price of $252,500 which included site improvements of $19,828, according to Mr Bale. His analysed sale price of $232,672 was applied at $200,000.
The Sale 3 property is an almost rectangular shaped level inside waterfront allotment with southerly aspect to water. The land has a waterfrontage of approximately 20 metres with views over what Mr Bale described as "an above average expanse of water".
He considered the sale to be inferior to the subject in residential location, being on a busier distributor road, having a somewhat shorter frontage to water and a "canal-like outlook over a narrower expanse of water" than enjoyed by the subject property. Whilst Mr Bidder took issue with use of the word "canal", I think it suitably distinguishes between the water aspect of the Sale 3 and subject property.
Mr Bale said that the sale property is superior to the subject with regard to its overall site area, which Mr Bidder also mentioned, but considered it overall inferior.
Mr Bidder said that the Sale 3 land has been improved by the construction of an Art Union home which maximises building on the site right up to the boundary. Whilst he saw that as a positive attribute, I should say that many people would want the retention of suitable garden and recreation areas in preference to the maximisation of development.
Mr Bidder said that the Sale 3 land is in a better street than the subject in that the greater width of Santa Cruz Boulevard accommodates parking on both sides, whilst passing traffic would be uninhibited. He conceded in cross-examination that Santa Cruz Boulevard was busier than Santabelle Crescent, though put that difference as being at a marginal level only. I do not accept that opinion. He suggested that some vehicles mistakenly come into Santabelle Crescent, thus increasing the traffic level there above what one might otherwise expect. It would take a large number of lost drivers, in my view, to increase the traffic level on Santabelle Crescent to a point where traffic volumes there were only marginally less than experienced by Sale 3. Clearly, Sale 3 would have more traffic going past it as Santa Cruz Boulevard is the distributor for a very large number of lots which are located to the west of the sale land. Passing vehicles would be travelling faster than on Santabelle Crescent and would generate greater noise.
Mr Bidder's judgment that the Sale 3 road is better than the subject is influenced by the apparent ease of access to the sale property compared with the subject. Whilst I would accept that access to the Sale 3 lot would be generally easier, I would observe that Santa Cruz Boulevard does not evoke the level of attractive intimacy that one finds in Santabelle Crescent near the subject property.
The value of the subject land must be greater than the $200,000 applied to Sale 3 on the evidence.
Before I leave the sale properties introduced by Mr Bale, I should mention evidence from Mr Bidder that some of the sales in the Clear Island Waters Estate were sold to builders on terms. Whilst he raised that proposition, he did not suggest that any of Mr Bale's sales fell into that category. It follows that I disregard that evidence.
Mr Bidder mentioned a number of property transactions that he suggested would have been more suitable bases than the sales relied upon by Mr Bale. One involved a vacant lot in Santabelle Crescent in around 1990. Mr Bale was aware of the property but said that he preferred sales proximate to the date of valuation. That is a correct approach.
Mr Bidder also mentioned a sale of an improved property at 10 Santabelle Crescent in November 2002 for $515,000 and other improved property sales. In Clough v The Valuer-General (1981-1982) 8 QLCR 70 at p.76 this Court said:
"It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at an unimproved value. The reason is obvious. In applying such sales there is no room for error in analyzing the value of the improvements."
For the reasons identified in Clough, the various improved properties mentioned by Mr Bidder are quite unsuitable in the conduct of an unimproved value exercise.
Reference was made by Mr Bidder to an unidentified publication of the Real Estate Institute of Queensland which was not tendered but which, it was put to Mr Bale, said that average prices for the June quarter in 2001 for Clear Island Waters properties was $390,000. Assuming the accuracy of that statement, Mr Bale said that such information would not assist him in his valuation.
Not only would the average price probably include both improved and unimproved properties of different standards, but it is not acceptable to value properties by use of the averaging of sales. That approach was rejected by the High Court in Commonwealth of Australia v Milledge [1952-1953] 90 CLR 157 in the joint judgment of Dixon CJ and Kitto J:
"He did not make any choice amongst the proved sales of other lands for the purpose of finding a basis for any reasoning of his own. Indeed he expressed the view, although he does not seem to have acted upon it, that the true basis for computation is not that to be found in one comparable sale, but in the average of a number, the larger the number the more acceptable the result. 'Such a statistical average', he added, 'will tend to eliminate the effect of the individual peculiarities (if any) of those in the transactions'. We do not find it possible to give countenance to this view. Perhaps it would be safer to work from an average of several prices than from one price if the sales were substantially contemporaneous sales of parcels of land which were identical in all material respects, but it must be rarely, if ever, that a process of averaging sale prices can be anything but fallacious." (at p.161)
Mr Bidder made reference to properties at Nos. 2, 4 and 6 Santabelle Crescent and the Chief Executive valuations applied to those properties as at 1 October 2001, noting that the values placed on those properties were substantially lower than that placed on the subject. No evidence of the values placed on those properties was led, so it is not evidence that I can usefully employ.
Mr Bale was asked in cross-examination why it was that he was able to produce a value exactly the same as that struck by the original valuer. He explained that he saw his task as being that of ascertaining from the available evidence whether he could support the original figure, not that of undertaking the task as if the slate was clean. That is, I think, an appropriate approach. The alternative would result in the excessive absorption of resources, confusion of property owners and no discernible benefit.
As may be observed from Mr Bale's sales evidence discussed above, the Chief Executive has elected not to apply each sale fully in adopting the unimproved value. Mr Bidder queried that approach. It is not objectionable, in my view, as it is employed in order to establish an acceptable relativity between values.
The sales evidence provided by Mr Bale is the best basic evidence presented to me. It comprises sales of lightly improved land within the same market as the subject property and proximate in time to the date of valuation. The sales have an added attraction in that Sales 2 and 3 "bracket" the adopted value of the subject property by setting both a ceiling (Sale 2) and a floor (Sale 3). I accept that it would not be an appropriate application of these sales to adopt a value below $200,000 or above $260,000.
The other advantage in the selected sales is that Sale 1 has an applied value quite close to the Chief Executive's value for the subject. I note also that that sale was all but fully applied. It is this sale, then, upon which I will focus.
In his approach to the comparison between the sale properties and the subject land, Mr Bidder has been less than objective. He has magnified and coloured the good features on the sales and overlooked their deficiencies. Mr Bale on the other hand has taken a more considered, objective approach.
The critical question is to ask whether Mr Bale has placed a value on the subject land which is appropriate in comparison to the Sale 1 land or whether that sale supports a figure closer to that contended for by Mr Bidder.
It is beyond debate, in my view, that the value to be placed on the subject land ought to be close to that evidenced in Sale 1. Mr Bale has placed the subject property marginally above the Sale 1 level. Has Mr Bidder's evidence dented that opinion? In Brisbane City Council v Valuer-General (1978) 5 QLCR 283 the High Court said at p.303:
"In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s.13(7) is rebutted." (s.13(7) is now expressed as s.33)
I to not think that the appellants have shown Mr Bale to have acted on a wrong principle or to have made a serious error of fact. Apart from that, I agree that on the evidence a value of $242,500 for the subject land is supported.
Accordingly, the appeal is dismissed and the valuation of the Chief Executive is affirmed.
RP SCOTT
MEMBER OF THE LAND COURT
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