Bray v Chief Executive, Department of Natural Resources and Mines
[2001] QLC 68
•18 July 2001
LAND COURT BRISBANE 18 July 2001
[2001] QLC 68
Re:Appeal against Annual Valuation Valuation of Land Act 1944 Property ID No: 1121010 Local Government: BCC-Hamilton (AV00-291)
Peter W Bray v.
Chief Executive, Department of Natural Resources and Mines
D E C I S I O N
Background:
This matter relates to land at 57 Markwell Street, Hamilton, and described as Lot 2 on RP 58441, Parish of Toombul. The subject land has an area of 814 m² and is conveniently located about 5 kilometres radially north-east of the Brisbane GPO and the Central Business District (CBD). All normal utility services are available, and Markwell Street is bitumen sealed with concrete kerbing and channelling. The subject land is zoned as Residential BR3 under the Town Plan of the Brisbane City Council of 30 October 1987, effective at the date of valuation of 1 October 1999. The subject land has been valued as a single residence site under Section 17(1) of the Valuation of Land Act 1944 (“the Act”). The key issues are the nature of the land, the availability of local services, comparison of sales and the method of valuation.
On 27 March 2000 the chief executive issued a valuation of the subject land at
$460,000. The previous valuation at 1 October 1998 had been $420,000. Following an objection the chief executive confirmed that figure on 1 July 2000. The appellant has now appealed claiming the unimproved value should now more properly be
$350,000. At the hearing on 14 June 2001, the appellant was granted leave to amend that estimate to $420,000, which is the amount now requested by the appellant. Mr Bray notes that the subsequent valuation at 1 October 2000 has valued the land at
$580,000.
Peter William Bray, solicitor, appeared and gave evidence on his own behalf. Mrs R Trigge, legal officer, appeared for the respondent, calling evidence from James Thomas Houghton, the departmental registered valuer responsible for determining the
valuation. With the agreement of both parties an inspection of the subject land and the sales was undertaken.
The Evidence:
The nature of the land -
It is agreed that the subject land is an elevated parcel on the south-eastern slopes of Hamilton Hill, with extensive views (about 120 degree arc) extending from the east towards the south-west. The views include the lower reaches of the Brisbane River down to the Gateway Bridge, and extend across Bulimba and Balmoral to the south. There is some dispute as to whether there are possible views of the edge of the CBD, although in its present configuration views of the CBD are restricted by the edge of the shoulder of Hamilton Hill as it extends towards the river. Buildings upon that part of Hamilton Hill currently restrict views in that sector to the south-west. Subsequent to the date of valuation a new building is now intruding into the river vistas to the south-east from the subject land.
Of concern to Mr Bray is the current potential for the extensive views from the subject land to be further impacted by new buildings on adjoining parcels. He notes for example that the current single story dwelling to the east on 67 Markwell Street could sometime be replaced with a much higher building. That would perhaps obstruct any views of the Gateway Bridge and much of the river views from the subject land. Mr Bray notes that there is no legal preservation of those views, and the potential risk of the views disappearing should be allowed for in the valuation of the subject land. Mr Bray concedes that views of the river are more valuable than views only of other houses.
The subject land has a width of 14.71 metres at its northern boundary, 24.29 metres at its southern boundary, and an average depth of 42.4 metres. The eastern boundary is at right angles to the northern and southern boundaries, but the western boundary tapers towards the front of the parcel. However the actual frontage to Markwell Street represents only about half of the width of the parcel (about 7 metres), with the remaining width contiguous with an adjoining parcel (67 Markwell Street). The effect of that reduced frontage is that the actual frontage to Markwell Street provides only for a single and double gate and a letter box set in a brick pier.
There was some dispute about the recording of distances to certain community services, although that really related to the semantics of how those services had been recorded. Mr Bray had measured the distances by vehicle odometer, while Mr Houghton had shown the distances as a radial measurement. In the end it is agreed
that the subject land is conveniently located to shops, schools, buses and churches, in what may be referred to as an upmarket inner city prestigious residential suburb. The relationship of the services has a common theme for both the comparable sales used and the subject land.
Of more significance is the description of the topography of the subject land. Mr Houghton describes the site in its natural state as falling moderately to the rear. The land has been extensively cut and filled to bench out a building pad, upon which is currently built a three story dwelling. Mr Bray sees the land as falling from north- west to the current building pad, a distance equal to about two storeys (about 6 metres), and then falling further to the south-eastern corner.
Mr Houghton provides a contour map of the site (Exhibit 9) which shows the land falling about ten metres from north-west to south-east. Those contours tend to support Mr Bray’s lay understanding of the slope of the land. However it needs to be realised that the description of “moderately” falling should be seen in perspective of Mr Houghton’s understanding of his sales evidence.
In terms of access to the subject land there is good access to the front boundary from Markwell Street, however access within the subject land itself is conditioned by the natural fall of the land, and the current excavation for building purposes. Mr Houghton argues that as the land is to be seen as vacant for the purposes of the valuation, any new building upon the site would seek to maximise any views, particularly towards the CBD area, if they could be seen.
The method of valuation -
Mr Bray argues that to his knowledge there have been no sales of properties comparable with the subject land. For that reason he has been unable to provide sales of other sites for comparison purposes. However Mr Bray then concludes that in assessing an unimproved value of $460,000, the chief executive has been influenced by the level of improvements on the land. Mr Bray was unable to personally quantify his estimate of the value of those improvements, but concludes that Mr Houghton has estimated an insufficient amount for their value. However I get no assistance from such assertions.
In his notice of appeal, Mr Bray notes eleven grounds of appeal, relying mainly upon grounds 4, 5, 6 and 9 as the major reason for the apparent inaccuracies in Mr Houghton’s valuation. Those grounds relate to the “cost of erection” of the improvements; the use of sales of lands which are not comparable; the limited economic use of the subject land; and the impact of the topography of the site. Mr
Bray bases those conclusions upon his personal experience of living on the subject land for the last 22 years.
Comparison of sales -
Mr Bray provides no sales to support his estimate of the unimproved value of the subject land. To support his valuation Mr Houghton provides the following sales of vacant or lightly improved lands:
· Sale 1 – (10 Kitchener Road - Lot 1 on RP 107490). This is a 607 m2 Residential A site located about 1 kilometre north of the subject land, in an attractive tree-lined quality residential street. The sale is a level parcel above road level, with an easterly aspect, and is one Lot removed from the intersection of Kitchener and Windermere Roads. Both Kitchener and Windermere Roads carry increasing traffic volumes, and Kitchener Road is a connecting road between Ascot and Hendra.
There are traffic lights at the northern end of Kitchener Road at the Upper Lancaster Road intersection. Because of parking by patrons of the Eagle Farm racecourse, Kitchener Road suffers from intrusions into the quiet amenity of the street during race days, which are held about three times monthly. There are no views of note from the sale.
The sale is seen as overall far inferior to the subject land due to its smaller size, lesser elevation, traffic disturbance, and lack of meaningful views.
Mr Bray argues that tends to undervalue the quality of Sale 2 which he sees as a much more attractive parcel as a building site.
The sale sold in April 1999 for $380,00, which was analysed at $376,000, and has been applied at $345,000.
· Sale 2 – (40 Mayfield Street - Lot 4 on RP 56514). This is a 658 m2 corner Residential A parcel, at the corner of Mayfield Street and Jolimont Avenue, located about 1.2 kilometres north of the subject land. An old timber dwelling was removed subsequent to the sale, and was sold by the purchasers for
$20,000. The sale is a level parcel, without views, in a first class residential area of substantial quality and character homes. The streetscape is enhanced by overhanging Poinciana trees, and the sale is seen as inferior overall to the subject land. Mr Bray also sees Sale 2 as a better building site than the subject land.
The sale sold in June 1998 for $485,000, which was analysed at $460,000 after allowing for the sale of the old dwelling, and has been applied at a conservative value of $420,000.
· Sale 3 – (12 Circe Street - Lot 14 on RP 34467). This is a 405 m2 Residential A parcel located about 0.9 kilometres north-west of the subject land, in an elevated position with extensive views of the Brisbane River and the CBD. The sale is a narrow corner parcel with access only from its northern end to Circe Street, or from Ludlow Street at its south. Circe Street is unformed
along the eastern side of the sale due to its very steep slope, and there are only walkway steps along that part of Circe Street.
Access to the northern part of the sale from Circe Street is further restricted by an access easement abutting its northern boundary, providing access to a neighbouring property to the west of the sale. Overall the sale is seen as slightly inferior to the subject land due to its smaller size, smaller frontage, and restricted access.
The sale sold with a set of approved Council plans for a new dwelling, which also allowed for the new access easement to the adjoining land owned by the vendor of Sale 3. The sale sold in August 1998 for $500,000, which after allowing for the approved plans ($30,000) and some clearing, was analysed at
$465,000, and has been applied at $450,000.
· Sale 4 – (8 Lawes Street - Lot 2 on SP 107878). This is a 608 m2 Residential A parcel with double frontage to Lawes Street to the north and Ludlow Street to the south. Sale 4 is located close to Sale 3. Both streets are narrow, with restricted parking, and Ludlow Street is a divided “No Through Road”. The sale falls very deeply from Lawes Street to the rear. The sale is elevated with sweeping river and CBD views, and is seen as superior to the subject land due to the double street frontage, general location, and the wide river and CBD views.
The sale sold in June 1999 for $642,000, which was analysed at $632,000, and has been applied at $590,000.
Mr Houghton agrees that his Sale 2 was an older sale in a rising market, and under those conditions it would not be unusual for a valuer to apply a less conservative application of such a sale. However he applied the very conservative application of Sale 2 at $420,000 in order to allow any benefit of doubt in the appellant’s favour.
Decision:
The nature of the land -
It is agreed that the subject land falls fairly steeply for about 10 metres from north-west to south-east. The land has only a restricted direct frontage of about seven metres to Markwell Street. In terms of difficulty for access within the subject land that is really a matter for consideration of any development upon the site. On balance I find that Mr Houghton has correctly assessed the nature of the land for his comparison with his sales of other comparable lands.
In respect of Mr Bray’s arguments that he knows of no sales of truly comparable lands for comparison, I note that many parcels have a level of uniqueness which makes direct comparisons difficult. However it is the skill of an experienced
valuer to draw comparisons with other land where there is some difference between the parcels. The use of comparable sales was well explained in Brewarrana Pty Ltd v. Commissioner of Highways (SA) (1973) 32 LGRA 170 where Wells J said at pages 179 and 180:
“It is general valuation practice for sales characterised as comparable sales to be used as bases for the valuation of lands said to be similar. But allowances must always be made before such sales can be so used.
… Before using any allegedly comparable sale, therefore, the valuer must consider whether, having regard to the circumstances (using that word in its broadest sense) appertaining to the parcel of land in question, and to the transaction of sale, there are sufficient similarities to the circumstances appertaining to the subject land and to the notional sale presupposed by the test formulated in Spencer v The Commonwealth of Australia (1907) 5 CLR 418 and in later cases to warrant a court’s reasoning from the sale price paid under the allegedly comparable sale, with or without other evidence, to a value for the subject land. … there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. … some adjustment is always necessary; too much adjustment will render it unsafe to use a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method. … the assessment of the risks of adjustment is peculiarly within his (the expert valuer’s) sphere of skill.”
In the current matter I believe Mr Houghton has used those skills to accurately assess comparisons with the subject land in its natural state. In that respect I note that section 3(1) of the Valuation of Land Act 1944 states:
“3.(1) For the purposes of this Act – “unimproved value” of land means -
(b)in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.”
The key issue in respect of the nature of the subject land lies in the assessment of the impact of the views that might be available from the land in its natural state. While Mr Houghton may have allowed for the potential to extend the views towards the CBD if the site was developed to its maximum potential, the physical evidence indicates that the views are currently limited to views of the river over an arc of about 120 degrees. I will therefore draw comparisons on that basis. In respect of Mr Bray’s
claim that future developments on adjoining parcel may impact those views, I believe that would be a matter for consideration at a later time if such developments did occur.
Comparison of sales -
In seeking comparison with sales of vacant or lightly improved lands, Mr Houghton has followed guidance by Courts of all persuasion when determining the unimproved value. That was clarified in W.M. and T.J. Fischer v. Valuer General (1983) 9 QLCR 44, where the Land Appeal Court said at page 46:
“It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence.”
A similar finding was also followed in P.H. Clough v. Valuer-General (1981-
82) 8 QLCR 70, at 76; and also in R. and M.M. Barnwell v. Valuer-General (1990- 91) 13 QLCR 13, at 17.
If I look then at Mr Houghton’s sales I find the following comparisons:
| Sale | Area | Applied Value | Comparison |
| 1 | 607 m2 | $345,000 | Far inferior |
| 2 | 658 m2 | $420,000 | Inferior |
| 3 | 405 m2 | $450,000 | Slightly inferior |
| 4 | 608 m2 | $590,000 | Superior |
| Subject land | 814 m2 | $460,000 | - |
I accept that all sales and the subject land have similar location and access to community services, and any difference in value was likely to relate mainly to the area of each parcel, its topography and the presence or otherwise of quality views. It is agreed that views of the river are in demand in the market place, and those views would appear to be enhanced in value when they also include unobstructive views of the CBD.
If I compare say Sale 1 and Sale 4 I note they have similar areas, but the presence of expansive views at Sale 4 would appear to have encouraged the market place to pay nearly twice the price for Sale 4. I note also that in comparing Sales 2 and 3, a parcel of area only two-thirds of the other, has a comparable value because it
has extensive views. On those figures I would agree that the presence of good river or CBD views would add to the value of lands in that locality.
On balance I believe there is nothing to demonstrate that Mr Houghton has made a serious error in his comparisons, or that he has used a wrong principle in his valuation. In that respect I note that direction is provided by the High Court of Australia in Brisbane City Council v. The Valuer-General (1977) 140 CLR 41, where Gibbs J found at page 56:
“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 section 13(7) is rebutted.”
Section 13(7) as it then was is now s. 33 which states:
“33. 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.”
However in seeking to understand Mr Bray’s opinion of the unimproved value of the subject land, I am reminded that the Land Appeal Court directed in B.T. Dillon
v. Valuer-General (1986-87) 11 QLCR 231, at page 233:
“The legislature has not given this Court any investigatory powers under the Valuation of Land Act. If the appellant’s case is not strong enough in its own right to establish the values contended for or to disprove the Valuer-General’s values, the Court is not empowered of its own volition to prove the fairness or correctness of the Valuer-General’s value and by this means arrive at its own estimate of value.”
In respect of Mr Houghton’s use of comparable sales, and his use of the conservative application of sales, I believe he has followed guidance outlined by the Land Appeal Court in Chief Executive, Department of Natural Resources v. Radlett Enterprises Pty Ltd (1997-98) 18 QLCR 397 at 403 and 404.
I am also directed to guidance in respect of comparing parcels, particularly those with views and those without views. While it is the market place which invariably decides the difference in value for the presence of quality views, the principles of comparing sites on their overall value as a site for a single residential purpose was clarified by the Land Appeal Court in Hans and Else Grahn v. Valuer- General (1992-93) 14 QLCR 327, at 330.
Summary:
In the end I am reminded that in respect of an appeal the onus of proving his case rests upon the appellant under s. 45(4) of the Act which states in respect of his notice of appeal:
“45(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.”
In the current matter the appellant has not satisfied that responsibility.
Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value of Lot 2 on RP 58441 as determined by the chief executive in the sum of $460,000 is affirmed.
MEMBER OF THE LAND COURT
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