Dobbie v Department of Natural Resources and Water

[2007] QLC 125

LAND COURT OF QUEENSLAND

CITATION:

Dobbie v Department of Natural Resources and Water [2007] QLC 0125

PARTIES:

Ian Hugh Dobbie & Janice Lorelle Dobbie
(appellants)

v.

Chief Executive, Department of Natural Resources and Water
(respondent)

FILE NO:

AV2006/0134

DIVISION:

Land Court of Queensland

PROCEEDING:

Appeal against annual valuation under the Valuation of Land Act 1944

DELIVERED ON:

7 December 2007

DELIVERED AT:

Brisbane

HEARD AT:

Ipswich

MEMBER:

Mr PA Smith

ORDERS:

1.     The appeal is allowed.

2.     The valuation of the subject land is determined at Three Hundred and Ten Thousand Dollars ($310,000) as at 1 October 2005.

CATCHWORDS:

Valuation – unimproved value – factors in valuation – relativity – decision arising from preliminary conference

Valuation of Land Act 1944
Land Court Act 2000

APPEARANCES:

Mr I Dobbie appeared in person for himself and his wife, Janice Dobbie, the appellants
Mr J Mauchline, Department of Natural Resources and Water, for the respondent

Background

1. This matter involves an appeal by the appellants against a valuation by the respondent, pursuant to the Valuation of Land Act 1944 (the VLA) which valued their property situated at 21 Henry Street, Brassall, Ipswich, in the sum of $320,000 as at 1 October 2005.  The appellants contend for a valuation of $290,000. 

1. The subject land is described as Lot 570 on Plan CC 783, Parish of Brassall, containing an area of 2.023 hectares. 

1. The subject land is located one block to the north of the intersection of Henry and Workshop Streets, Brassall.  There are five residential blocks in this part of Henry Street, each over 2 hectares in size.  There are a further three residential blocks to the east of Henry Street along Workshop Street, also each with an area above 2 hectares.  To the south of Workshop Street is a very substantial residential development.  There is also substantial residential development to the north, located to the west of where Henry Street connects with the Ipswich-Warrego Highway Connection Road.  Although Henry Street is a gazetted road and connects the Ipswich-Warrego Highway Connection Road with Workshop Street on the plans, Henry Street is unmade from just to the north of the subject land until just to the south of the connection with the Ipswich-Warrego Highway Connection Road and Highmead Drive. 

1. The subject land is of regular rectangular shape and is situated on the eastern side of Henry Street.  The subject land rises from Henry Street to about the middle of the block and then falls from the middle to the back of the block.  The subject land has sealed road frontage without kerb and channelling.  The subject property has no facility for sewerage connection, and although town water is installed to the subject property, such water comes from a private water line installed at Mr and Mrs Dobbie’s own expense.

Preliminary Conference

1. A preliminary conference was held in this matter in accordance with section 36 of the Land Court Act 2000.  I presided at the preliminary conference.  The matter is somewhat unusual in that both parties agreed with the sales evidence for the area, the only point of conflict being the nature in which the disabilities suffered by the subject land should be viewed when compared to the valuations applicable to neighbouring and nearby properties of similar size.  Thus, the principal point of difference related to relativity. 

1. Both parties were keen to avoid a formal hearing of this matter and believed that nothing further could be provided to the Court than that which had been stated at the preliminary conferences, save for a view of the subject and surrounding properties. Both parties requested that, pursuant to the power set out in section 36(6) of the Land Court Act 2000, I dispose of the matter without a further hearing.  In consenting to this course of action, both parties also requested that, in company with both parties, I conduct an inspection of the subject and surrounding properties. 

1. I subsequently conducted an inspection in the company of Mr Dobbie and Mr Mauchline, and my decision in this matter is based on the information provided to me by the parties at the preliminary conference and as viewed by myself at the inspection.

1. It should be noted that Mr John Mauchline is a registered valuer employed by the respondent and was the valuer responsible for the unimproved valuations of the subject land and surrounding lands. 

Relevant legislative provisions

1. Pursuant to s.13 of the VLA, the respondent is required to determine the unimproved value of the land.  Relevantly, s.3(1) of the VLA says as follows:

   “3.(1) For the purposes of this Act –
   ‘unimproved value’ of land means –

   (a)      in relation to unimproved 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; and
   (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.”

1. I note that the subject land in this matter is improved.  Accordingly, put simply, the task is to find the market value of the land on the assumption that none of the improvements are on the subject land.  An assessment is then undertaken as to the highest and best use of that land.

1. As the President said in Fairfax v Department of Natural Resources and Mines [2005] QLC 0011 at paragraphs 11 and 12:

   “The principles for determination of the 'market value' of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 441).

   It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land.  In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that:

   'Land in my opinion differs in no way from any other commodity.  It certainly is more difficult to ascertain the market value of it but – as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales."”

I respectfully agree with these observations.

Presumption of correctness of valuation

1. I now turn to section 33 of the VLA, which states as follows:

   “33    Status of valuation

   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.”

2. This section was considered by the High Court in the case of Brisbane City Council v The Valuer-General for the State of Queensland 1977-78 140 CLR 41 where Justice Gibbs (as he then was) made the following observation 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 s. 13(7) is rebutted.”

It should be noted that s. 33 of the VLA is in essentially the same terms as what was then s. 13(7) of the Act. 

The issues in the Appeal

1. The appellants have raised a number of points which they say have not been properly taken into account by the respondent in assessing the unimproved value of their property.  The first point is that the subject property does not have town water supply provided to it as such.  The appellants have, at their own expense, provided a private water line to the subject land.  The appellants allowed an extension of their private water line to their neighbours to their immediate north and south (Lots 569 and 571). 

1. The appellants’ second point is that the subject land does not have sewerage connection provided, unlike Lot 571 to their south and Lots 572, 573 and 574 to the east, and Lot 154 at the northern end of Henry Street.

1. The next point of difference between the subject property and neighbouring properties argued by the appellants is that, unlike Lots 154, 572, 573 and 574, the subject land does not have kerb and channelling.  The subject property is fronted by a formed, sealed road. 

2. The subject property has a ridge which dissects the block, essentially through the middle running in a north south direction.  A similar feature exists on Lot 571 to the south.  The appellants argue that the existence of this ridge is a devaluing factor for their block. 

1. The appellants also argue that Lots 563 and 564, both to the west of the subject and of larger size than the subject (approximately .9 and .37 of a hectare each larger respectively) increased from the last valuation period by 15%, whilst the subject increased by 25%.  The appellants contend that Lots 563 and 564 are superior to the subject block.

1. The appellants contend that their block should be valued the same as Lot 154, which has a current unimproved value of $290,000. 

Decision

1. Clearly, the principal aspect of this appeal relates to a relativity argument as between the subject land and surrounding or nearby blocks of a similar size.  The question of relativity was addressed by Member Scott in the Land Court case of Thomson v Department of Natural Resources and Mines[1] where he said, at paragraphs [7] and [8]:

   “This issue has come up on more than one occasion in the past, one example being found in Gibson v Chief Executive, Department of Lands (V92-64 unreported Land Appeal Court 9 June 1995) at 6:

   ‘We reiterate what has been said often before – and what is Mr Tighe’s chief concern – the importance of correct relativity in the equitable distribution of the rating burden cannot be overstated.  However the question before this Court is the correct valuation of the subject land, not the correct valuation of an area.  It would not advance the appellant’s case to satisfy us that her neighbour’s land was undervalued: … The appellant must show that the valuation of her land was incorrect.’

   A similar opinion is expressed by the Land Appeal Court in Bignell v Chief Executive, Department of Lands (AV92-65 unreported Land Appeal Court 4 March 1996) at 11:

   ‘What has to be decided in this case is the proper value of the subject land by reference to sales evidence about comparable unimproved properties. … If a proper valuation of the subject land makes it consistent with the relative values of neighbouring blocks then so be it.  The question before this Court is ‘the correct valuation of the subject land, not the correct valuation of the area’.”

   [1] [2007] QLC 92.

2. I respectively agree entirely with Member Scott and with the passages he has quoted from Gibson and Bignell.  Given the evidence presented in this appeal and the respective values of the subject land and surrounding blocks of a similar size, what is the proper unimproved value of the subject land?

1. As stated at the outset, this appeal has proceeded on the basis that the sales evidence supports the general unimproved value applied to all of the blocks referred to above.  In essence, what the appeal is about is a fine tuning of the subject block, taking into account its disabilities, when compared to surrounding blocks. 

1. I will proceed upon the assumption, which is both supported by the VLA and by the parties in this matter, that the valuation of Lots 572, 573 and 574, each valued in the sum of $320,000, is correct.  I note that each of those three blocks is essentially the same size as the subject block.  Those blocks do not have a ridge, they rise from their road frontage to the back of the block, and they have a sealed road, kerb and channelling, sewerage and water.  In those respects, they are superior to the subject.  However, I also note that those blocks are directly opposite a large sized, modern residential estate.  Thus, whilst they enjoy superior services to the subject, they do not enjoy the same rural outlook and aspect of the subject.  For completeness, I note that the subject is surrounded on all sides by large rural residential blocks.  

1. I also agree with Mr Mauchline that, rather than being a disability as alleged by the appellants, the ridge acts as an enhancement to the property by allowing a superior outlook from the top of the ridge to that enjoyed by other properties.  I note that the appellants have constructed their residential dwelling at the top of the ridge to take advantage of this superior outlook.  I further note that the Lots 563 and 564 fall away from Henry Street whilst the front part of the subject block rises up the ridge.  In my view, that element of the subject property is also superior to Lots 563 and 564.  This aspect however is counterbalanced to some extent by Lots 563 and 564 being of a superior size, with Lot 563 being almost 50% larger in size than the subject.

1. Significant reference was made by the appellants to Lot 154.  Indeed, they contend that the value of their block should be set at the same amount as Lot 154.  Mr Mauchline argues that Lot 154 is essentially in a different market to the subject.  He bases this on the fact that Henry Street is unformed between the subject and Lot 154 and that Lot 154 is a stand alone large residential type block in area containing significant small lot development.  Mr Mauchline also points out that Lot 154 is of a quite irregular shape. 

1. In general, I agree with the observations of Mr Mauchline regarding Lot 154.  However, even taking into account the comments made by Mr Mauchline, given its close proximity to the Ipswich-Warrego Highway Connection Road and all of the services that it enjoys, Lot 154 would seem, in being valued at $290,000 as at 1 October 2005, to be undervalued.  This of course does not assist the appellants in making out their case. 

1. Taking into account all of the aspects referred to above, in my view the subject should be valued at approximately 3% below the unimproved values of Lots 572, 573 and 574.  A 3% reduction of $320,000 equates to $9,600, which for the purposes of this valuation I round up to $10,000.  I therefore conclude that the valuation of the subject land should be reduced to $310,000.

Postscript

1. It is unfortunate that the delivery of this decision has taken longer than anticipated.  At the time that I heard the matter, I only held a part-time appointment to the Land Court, my full-time appointment being as Deputy President of the Land and Resources Tribunal.  Requirements of the Land and Resources Tribunal, beyond my control, necessitated all Land and Resources Tribunal work taking precedence over this matter.  Fortunately, that situation has been resolved by the amalgamation of the bulk of the jurisdiction of the Land and Resources Tribunal into the Land Court, and my corresponding appointment as a full-time Member of the Land Court.

Order

1.The appeal is allowed.

2.The valuation of the subject land is determined at Three Hundred and Ten Thousand Dollars ($310,000) as at 1 October 2005.

P A SMITH

MEMBER OF THE LAND COURT