Gillis v Department of Natural Resources and Water

[2007] QLC 33

LAND COURT OF QUEENSLAND

CITATION:	Gillis v Department of Natural Resources and Water [2007] QLC 0033
PARTIES:	Glen W Gillis (appellant)
v.
Chief Executive, Department of Natural Resources and Water (respondent)
FILE NO:	AV2005/1024
DIVISION:	Land Court of Queensland
PROCEEDING:	An Appeal against an Annual Valuation of land under the Valuation of Land Act 1944
DELIVERED ON:	20 April 2007
DELIVERED AT:	Brisbane
HEARD AT:	Ipswich
MEMBER:	Mr PA Smith
ORDER:	The appeal is allowed, the valuation of the Chief Executive set aside and the unimproved value of the subject land determined at Sixty-one Thousand Dollars ($61,000) as at 1 October 2004.
CATCHWORDS:	Valuation – Factors in Valuation – relativity – evidence at hearing of subject land incurring total water coverage during significant storm events – Valuation of Land Act 1944
APPEARANCES:	Mr W Gillis, in person Mr PJ Wilson, Counsel, Department of Natural Resources and Water

Background:

1. This is an appeal by the appellant against a valuation by the respondent, pursuant to the Valuation of Land Act 1944 (the VLA) which valued the appellant’s property situated at 35 Wellen Street, Bundamba in the sum of $62,000 as at 1 October 2004.  The appellant contends for a valuation of $21,500.

2. The subject land has an area of 809 m² and is of regular rectangular shape.  The land is serviced with electricity, telephone, town water and sewer, as well as weekly kerbside rubbish collection.  Wellen Street is a bitumen sealed road with grass verge.  The subject land is located approximately 500 metres from the Bundamba State High School, 2 km from Bundamba Primary School, Bremmer TAFE and Bundamba railway station and about 3.5 km from the Booval Fair shopping centre.  Bundamba is described as a well serviced residential suburb.

3. The subject land is a corner block although road access is only easily obtained from Wellen Street.  Ronald Street is unformed along the eastern side boundary of the subject property.  A residential development site is situated further to the east of Ronald Street.  Ronald Street does not provide vehicular access to the residential development site. 

4. The subject land is considered low lying and is effectively split by a council drainage easement.  The easement is of an area of 109 m².  The subject land is currently used as a single residence, such use being consistent with the Ipswich City Council planning scheme designation of RL2 residential low density. 

5. The appellant was self represented and gave evidence at the hearing.  Mr Gillis has no legal or valuation qualifications.  The respondent was represented by Mr P J Wilson, a senior counsel employed by the respondent, and relied on evidence of a registered valuer, Mr J Carey. 

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.

2. 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 appellant’s notice of appeal can be summarised down to a few essential points.  Firstly, the appellant argues that the subject land is low lying and subject to flooding; is subject to a drainage easement and sewer lines; a combination of the easement and council’s sewer significantly deceases the amount of available land upon which a dwelling can be constructed; and that on a relativity basis the subject land should be valued much lower than other residential lots in Wellen Street in light of the subject land’s impediments.

2. Although the appellant has no valuation evidence, he is to be commended for the manner in which he presented his material to the court and dealt with issues of relativity.  Relativity is of course a matter which is often argued before this court.  Put simply, appellants often compare the valuation for their property with values attributed to properties nearby which are of an equivalent nature but may be of quite a different value and argue that for principles of fairness, the relativity between their property and the other property should be the same.  This is essentially what the appellant has done in this case, except that the appellant has considered the various disadvantages of suburban blocks of similar size to the subject in close proximity to the subject; has analysed the disabilities that those properties have; and, in noting that some of those properties are valued at a lower figure than his property, submitted that the valuation of his property should be reduced to lower than other specified valuations. 

3. The approach adopted by the appellant, and in deed many other appellants before this court, ignores the fact that such approach proceeds on the assumption that the other blocks that the subject is compared with have received an accurate valuation.  It may well be the case that the evidence in any particular case will show that the subject block has indeed been valued appropriately and that some other blocks, not the subject of appeals, have been incorrectly valued at a lower valuation.  On its own, and in isolation, that cannot be enough to cause an adjustment in the valuation of the subject property.  The situation may of course be different if it can be shown that a large number of surrounding blocks have been valued in such a way as to form a relativity issue with the subject.  That, however, is not the case in this matter.

4. I accept the evidence of the appellant regarding the disabilities suffered on the subject land.  I also accept in particular the evidence given by the appellant at the hearing of this matter where he said:[1]

   "There is evidence from long-time residents in the area before the estate was developed that as young fellows they used to swim in a natural dam or swimming hole which was located on or about the location of my property which tended to emphasis the natural water flow across this part of the district.  As it is a natural water path, the water that flows across the land is, from time to time, subject to flooding, particularly after heavy storms which we experience mostly in summer.  This resultant flooding of my land has been noted in council records that it may occur.  The original building approval for the land on this estate required that the land be maintained with a contour so the water would generally pass in the area of the easement.  This has been proved during storm surges:  that the contoured land is insufficient to maintain the natural water flow across the land and in Appendix 3 of my statement there are a number of photos there which shown water completely over the land, both sides of the house, at the rear of the house and across the front of the house and also the residue of the surge through the house.  So it’s quite evidence from these photos that the natural contouring required for the easement is insufficient for this particular block."

   [1]     Key:  4.

5. A direct comparison approach has been adopted by the respondent’s valuer to determine the unimproved value of the land.  As is so often the case in matters such as this, the issues basically all come down to market evidence.  This is reflected in the sales evidence set out in Mr Carey’s report.  Mr Carey’s evidence relates to four sales as follows:

Sales	Area M2	Date of Sale	Analysed U/Value	Applied U/Value 1/10/2004	Comparison
1 12 James Street BUNDAMBA	809	14/03/2005	$84,000	$61,000	Inferior
2 28 Braeside Road BUNDAMBA	474	26/03/2004	$96,200	$75,000	Superior
3 9 Ogilvie Street BUNDAMBA	1291	02/08/2004	$91,700	$91,000	Superior
4 85 High Street BUNDAMBA	1488	16/08/2004	$90,000	$80,000	Superior

1. Save for one exception, I accept the evidence of Mr Carey.  Mr Carey both in his evidence and in his report, placed significant reliance upon sale no. 1.  In comparing the subject property to sale property no. 1, Mr Carey had this to say in his report:

   "Comparison to Subject:  The sale is located within 200m of the subject.  It is of a similar land size with slightly lesser elevation.  Both have similar access issues with the potential for Wellen Street and the top end of James Street to be impacted by short term flooding after a major storm event.

   The subject is severed by a stormwater overflow path through the mid section to rear part of the block whilst the sale property has a stormwater overflow path down the full length of the southern side and through the rear.  Both overland flow paths have substantial catchment areas which drain through the respective properties.  A major point of difference between the properties is the size of the drainage easements relating to each, the subject property having an easement area of 109 m²  (13.5% of total property area) whereas the sale property has an easement area of 514 m² (63.5% of total property area).  The unaffected area of the sale property offers a minimal frontage of 10.117 metres, is irregular shaped and partly severed by a sewer main consequently permitting only a very small dwelling to be constructed.  The subject is not constrained to the same degree.  The sale is inferior to the subject."

2. In arriving at a valuation of $61,000 for sale property 1 as at 1 October 2004, Mr Carey has undertaken a detailed exercise in valuing the improvements on the sale property in order to arrive at an unimproved valuation.  I accept the analysis made in this regard by Mr Carey as set out at annexure 4 of his report.  My only point of difficulty with respect to Mr Carey’s evidence is his conclusion that sale number 1 is inferior to the subject. 

3. At page 2 of his valuation report, Mr Carey states that:

   "The valuer has not been in attendance during a flooding event however photographic evidence supplied by the appellant would support the appellant’s view that part of the subject block has previously been flooded during storm events."  [my emphasis added] 

4. As detailed earlier, the evidence of the appellant, which I accept, is clearly that all of the subject land is subject to water inundation, particularly during severe summer thunderstorms.  The appellant provided photographic evidence in Exhibit 2 which supports his oral evidence.

5. It would seem that Mr Cary was not aware of the full nature of the inundation difficulties experienced by the subject land until the hearing of this matter.  When I then compare the relativity of Sale 1 to that of the subject, sale 1 is a property that is significantly impacted by a drainage easement leaving only a very small area of land on which a residential house can be built, but that area on Sale 1 where the house is located is above the stormwater influence area.  On the other hand, while the subject property has a significantly lower impact from the drainage easement, all of the subject land is subject to water inundation during significant storm events. 

6. In my view, when the relevant disabilities of sale 1 and the subject are fully taken into account, with the benefit of the additional evidence provided at the hearing, it is my view that each property in its own way suffers significant disabilities resulting in neither being superior nor inferior to the other.  In my view, it is appropriate that both the subject and sale number one should receive like valuations.

Conclusion

1. For the reasons set out above, I have reached the conclusion that the appellant has partially proved his case.  I consider that the subject property should receive a like valuation to that of sale 1, which is valued in the sum of $61,000. 

Order

The appeal is allowed, the valuation of the Chief Executive set aside and the unimproved value of the subject land determined at Sixty-one Thousand Dollars ($61,000) as at 1 October 2004.

P A SMITH

MEMBER OF THE LAND COURT