Dillon & Offermans v Chief Executive, Department of Natural Resources and Mines

LAND COURT

BRISBANE

8 MARCH 2002

Re: Appeals against Annual Valuations

Valuation of Land Act 1944
Property ID:   5122976 (AV2000/0456)
  5122252 (AV2000/0457)
  Local Government:    Townsville

Jillanne Dillon (AV2000/0456)

Bridgette C Offermans (AV2000/0457)
v.

Chief Executive, Department of Natural Resources and Mines

(Hearing at Townsville)

J U D G M E N T

These reasons relate to two appeals arising under the provisions of the Valuation of Land Act 1944, both appeals being heard together with the consent of the parties. Appeal AV2000/0456 is concerned with a property owned by Jillanne Dillon (which I will call the Dillon land), which the Chief Executive valued at $275,000. The appellant contends that the value ought to be $190,000. Appeal AV2000/0457 relates to a property owned by Bridgette Offermans (the Offermans land) which was valued by the Chief Executive at $210,000, whilst the appellant provided an estimate of value at $160,000. Both properties were valued as at a relevant date of 1 October 1999. The grounds of appeal in each case were drawn in sufficiently broad terms to encompass the issues raised between the parties.
Valuation evidence in support of both appeals was provided by Craig Stack, a registered valuer, whilst Robert Arthur Noakes, also a registered valuer, was called by the Chief Executive to provide valuation evidence.
The Dillon property is located at 2 Cottesmore Crescent, Yarrawonga, in the City of Townsville and is described as Lot 1 on Registered Plan 800996, having an area of 1,256 m². In his valuation report Mr Stack said that Yarrawonga is one of the premier residential estates in Townsville and is situated in the north-western foothills of Castle Hill where many properties enjoy views of Cleveland Bay. The Dillon land has been developed with a single dwelling and is generally surrounded by dwellings including many of high quality and cost. There is, however, a vacant parcel of land adjacent to the rear of the subject land. That is 4 Cottesmore Crescent, Yarrawonga, a parcel which shares a common boundary with a somewhat higher parcel of land upon which is constructed a large Telstra tower, which has attached to it a number of aerials and dishes which serve some electronic communication purposes. The Telstra site comes within 5 to 10 metres of the Dillon land. It does not interfere with the view but is an obvious and unattractive presence for the Dillon land. Whilst Mr Stack saw it to be appropriate to include mention of the Telstra tower in his valuation report, I could find no mention of this feature in Mr Noakes' valuation report.
The Dillon land is a near rectangular shaped corner parcel that rises steadily to moderately from road level. As part of its development the property has been terraced to form a level building platform. The property, according to Mr Stack, comprised hard granite subsurface formations with decomposed granite to surface areas. Geology of that type would mean that the construction of foundations would be more difficult than in softer ground conditions. Whilst Mr Stack thought this feature to be one of significance for the Dillon property, I drew from the evidence an understanding that the property is not unique in the area in this regard. I do, however, accept Mr Stack's description of the difficulty in providing access off the available roads onto the subject land. The access as constructed is taken off Cottesmore Crescent rather than Balmoral Drive and provides entry onto the property from the rear. That appears to me to have been the most desirable position for an entry if one were to make the most of the views available from the property. Those views are to the Townsville foreshore, Cleveland Bay and Magnetic Island and in Mr Noakes' report were described as "unrestricted panoramic views".
Both the Dillon and the Offermans properties enjoy the usual facilities and services of sealed roadways with concrete kerbing and channelling, as well as reticulated water, electricity, sewerage and telephone services.
The Offermans property is located at 368 Stanley Street, North Ward in Townsville City, has an area of 902 m² and is described as Lot 1 on Registered Plan 727844. It has been developed by the construction of a single dwelling. Subdivision of land in the area of the Offermans property appears to have been undertaken during the early to mid-1900's resulting in there being dwellings of some age in the area, though also some semi-modern dwellings which are generally of good quality. Multi-residential development is not encountered in the immediate vicinity of the subject land, though is to be found in areas of lower elevation to the north.
The Yarrawonga Estate in which the Dillon property is to be found is to the north-west of the Offermans property in an area which has been rapidly developed with new residential lots and new houses over the past three years.
The Offermans property is a regular shaped parcel that rises moderately from the road level and in an unimproved state comprised hard granite subsurface formations with decomposed granite to the surface areas. It, therefore, suffers similar disabilities in construction to that encountered on the Dillon property. The Offermans property has views in a northerly to north-easterly direction described by Mr Noakes as being "unrestricted panoramic sea views towards Magnetic Island" though, as I understand the evidence overall, these would be views of lesser breadth than those available from the Dillon property.
I had the advantage of inspecting each of the subject properties and the sales referred to by both valuers. These inspections assisted me in my appreciation of the evidence.
In his valuation of the Dillon property Mr Stack included a schedule of nine sales which comprised his primary valuation evidence:

Address:	Land Area: m²	Sale Price:	Sale Date
1. 30 Balmoral Drive, Yarrawonga	1,037	$145,000	March 1999
2. 30 Balmoral Drive, Yarrawonga	1,037	$150,000	August 1999
3. 32 Balmoral Drive, Yarrawonga	833	$135,000	March 1998
4. 32 Balmoral Drive, Yarrawonga	833	$159,000	September 1998
5. 34 Balmoral Drive, Yarrawonga	863	$125,000	March 1998
6. 34 Balmoral Drive, Yarrawonga	863	$159,000	October 1998
7. 36 Balmoral Drive, Yarrawonga	883	$134,000	April 1998
8. 38 Balmoral Drive, Yarrawonga	849	$120,000	June 1998
9. 38 Balmoral Drive, Yarrawonga	849	$135,000	November 1998

I note that Sales 1 and 2 and 4 and 6 are also included in Mr Noakes' valuation. Both valuers acknowledged that there was a market improvement between 1998 and 1999. I take that into account in my conclusions on value. An additional schedule of sales described as sales which were "further support" were provided by Mr Stack in his valuation of the Dillon land:

Address:	Land Area: m²	Sale Price:	Sale Date
10. 4 Cottesmore Crescent, Yarrawonga	950	$135,000	April 1999
11. 89 Yarrawonga Drive, Yarrawonga	1,028	$143,000	April 1999
12. 6 Yongala Court, Yarrawonga	945	$145,000	June 1999
13. 8 Yongala Court, Yarrawonga	995	$146,000	February 1999
14. 3 Yongala Court, Yarrawonga	931	$150,000	March 1999
15. 5 Yongala Court, Yarrawonga	798	$155,000	February 1999
16. 4 Yongala Court, Yarrawonga	1,288	$155,000	October 1999
17. 99 Yarrawonga Drive, Yarrawonga	944	$172,000	October 1999
18. 5 Arundel Court, Yarrawonga	888	$275,000	September 1999

I note that Sales 11, 13 to 15 and 17 to 18 were also included in Mr Noakes' valuation.
In his valuation of the Offermans property Mr Stack included the same sales as referred to in his valuation of the Dillon land, however rather than presenting the sales as two distinct schedules, they were included in the form of a single schedule.
In each of his valuations Mr Stack also included four sales outside the Castle Hill precincts which are referred to as "secondary market evidence". Given the course of the evidence, I see no benefit in making further reference to these secondary sales.
Mr Noakes included a schedule of 28 sales in each of his valuations. Eleven of these sales comprised sales common to those included in Mr Stack's valuations, however it was not these common sales that formed the basis of Mr Noakes' valuation, but a series of three sales only (Nos. 2, 3 and 4).
I will first of all consider the value of the Dillon property and in that respect will make reference to Mr Noakes' Sale 4. That sale property is located at 1 Cottesmore Crescent, Castle Hill and sold in November 1998 for $230,000. The sale is recorded in Mr Noakes' valuation as having had a residence on it which was removed and in respect of which he attributed no value. Mr Stack's evidence, however, was that whilst the house structure was removed following the purchase of the property, a new house was built employing the existing slab and plumbing. In his view, therefore, these improvements comprised an added value to the land and would logically have been included as a material consideration in the settlement of the sale price. The submission was that given the failure on the part of Mr Noakes to provide a sale analysis, the sale cannot be employed as a basis for valuation in a case arising under the Valuation of Land Act.
Mr Noakes' response to that proposition was to say that the relativity of the sale price of the property at 1 Cottesmore Crescent to his Sales 2 and 3, which I will come to shortly, is correct, therefore the improvements do not add value. The Sales 2 and 3 have sale prices of $287,500 and $275,000 respectively and are, it is agreed by the parties, superior to the Dillon property and to Mr Noakes' Sale 4 property. The dispute between the appellant and the Chief Executive in this case, however, relates to the degree of that superiority so Mr Noakes' view as to the relativity between the Sale 4 property and his other sales really begs the question as to whether the comparison that he has undertaken is appropriate or not. It seems to me in these circumstances that it would be unsafe for me to place further reliance on Mr Noakes' Sale 4.
Before I come to the other sales relied on upon by Mr Noakes, some useful reference may be made to a sale at 4 Cottesmore Crescent included in Mr Stack's support schedule in the Dillon valuation. That lot of 950 m² was carved out of a site which now contains the prominent and unsightly Telstra tower. The sale land is of irregular shape making it difficult to both access and develop. I conclude that it has a slightly inferior aspect to the Dillon property, but that its shape and proximity to the Telstra tower, which looms over it, lead to a conclusion that it is substantially inferior in value. Its sale price in April 1999 of $135,000 confirms this, if one is to compare that price with the suggested value to be placed on the Dillon land by both valuers.
The main dispute between the two valuers was whether the sales referred to by Mr Stack found mainly in Balmoral Drive, Yarrawonga or Mr Noakes' sales in Arundel Court are the better bases. So far as Mr Stack was concerned, the critical points of comparison between the Balmoral Drive properties and that of the appellant Dillon is that each of the sales has a smaller land area and a site topography/configuration which would allow easier construction than on the subject property. Mr Noakes disputed the second point of this comparison, however I accept Mr Stack's view on that point. Mr Stack had a third point of comparison and that was his view that each of the sale properties on Balmoral Drive enjoyed a similar aspect to that available from the Dillon property. Mr Noakes, on the other hand, expressed the view that the Balmoral Drive properties, as well as those in Yongala Court included in Mr Stack's support schedule, ran the risk of losing some views as houses were developed below them. Whilst steep slopes in the area of these sale properties would act to preserve views to a large extent, I have no reservation in concluding that Mr Noakes is correct in his observation. I had the advantage of closely inspecting all of the sale properties and was able to appreciate the different opinions on this point quite fully.
Sale 2 in Mr Noakes' valuation is at 4 Arundel Court, Castle Hill. The sale took place on 20 April 1998 for a sale price of $287,500. The sale land has an area of 1,239 m² and comprises an irregular inside allotment in a cul-de-sac in an elevated locality. It has steep crossfall and unrestricted panoramic ocean views. In Mr Noakes' opinion the sale land is slightly superior to the Dillon property, though Mr Stack expressed the view that the sale property would be substantially superior to the Dillon land in that the sale has more expansive views.
Sale 3 in Mr Noakes' valuation was of a property at 5 Arundel Court. The sale took place on 29 September 1999 for a sale price of $275,000. The sale land has an area of 888 m², is an irregular corner allotment in the same cul-de-sac as Sale 2. It has a steep crossfall and has panoramic ocean views which are partly inhibited at ground level by the building on the Sale 2 property. Mr Noakes expressed the view that this property was comparable to the Dillon property. Again Mr Stack disagreed, expressing the view that not only is the sale at 5 Arundel Court superior to the subject in land formation and in views, but said that the purchaser may have paid a little more for that property than its market value. The purchaser is a well-known builder in Townsville who has, since purchase, constructed a large and prominent home on the land which acts as both a place of residence and as a promotion of the builder's business. Certainly the purchaser has made optimum use of this site, but I do not think that this lot uniquely offered that prospect to this particular purchaser. Nevertheless, I do agree with Mr Stack that the sales at 4 and 5 Arundel Court offer superior views to that available from the Dillon property and an opportunity to construct a residence with limited ground preparation being required.
Mr Noakes' Sales 5, 6 and 7, which entered debate briefly, are sales of properties at 5 Melton Terrace, Townsville City, 27 The Strand, North Ward and 11 Cleveland Terrace, North Ward. I have considered each of these sale transactions in reasons handed down today in the matter of Spry and Menkens v. Chief Executive, Department of Natural Resources and Mines (AV2000/0461 and AV2000/0464) and conclude that those transactions, as presented, do not provide suitable bases for valuation for single dwelling purposes. The remaining sales in Mr Noakes' valuation comprise sales in the same locality as the bulk of Mr Stack's sales, so do not merit attention.
It seems to me that Mr Noakes has been influenced too greatly in his comparisons with the level of value revealed by the Arundel Court sales and with insufficient allowance being made for the presence of the Telstra tower which clearly impacts on the visual amenity of the Dillon property. Nevertheless, the subject land is clearly superior to the Balmoral Drive and Yongala Court sales referred to in Mr Stack's valuation. The differential between those sales and the sales at Arundel Court indicate that some substantial allowance should be made for the superiority of the subject land over the sales referred to by Mr Stack. He has applied a value of $190,000 to the Dillon property, which is higher than all of the prices revealed by his sales but which, in my view, takes inadequate notice of the prices sales at Arundel Court and the improvement in the market between 1998 and 1999.
In the result my judgment is that the value of the Dillon land at $275,000 is too high and will settle on a value of $240,000.
As I have indicated above, both valuers included the same sales in their valuations of the Offermans property. Both agree that the views from that property, which are to the north and north-east are not as expansive as those from the Dillon property. Stanley Street is a narrow street formed at two levels and does not provide for easy access onto the subject land or easy turning for those visiting the property. Building on the Offermans land would pose some difficulties in the construction of foundations as the type of off-the-slope structure available in Balmoral Drive and Arundel Court could not be availed of on the Offermans property.
I lean to the view that the value of the Offermans property ought to be closer to those sales in Balmoral Drive and Yongala Court than the sales at Arundel Court. It seems to me that Mr Noakes has made insufficient allowance for the more expansive views available from these higher priced properties, as well as the land form available which would facilitate construction using modern engineering techniques. In the case of the Offermans property I think a value of $190,000 would more appropriately represent an application of the sales evidence.
In the result I allow the appeal in the case of AV2000/0456 and determine the value of the Dillon land at Two Hundred and Forty Thousand Dollars ($240,000). I allow the appeal in the case AV2000/0457 and determine the value of the Offermans property at One Hundred and Ninety Thousand Dollars ($190,000).

RP SCOTT
MEMBER OF THE LAND COURT

[2002] QLC 21

8 March 2002