Goodwin v Department of Natural Resources and Water

[2009] QLC 171

LAND COURT OF QUEENSLAND

CITATION:	Goodwin v Department of Natural Resources and Water  [2009] QLC 0171
PARTIES:	Thomas Goodwin and Sylvia  E Goodwin (applicants)
v.
Chief Executive, Department of Natural Resources and Water (respondent)
FILE NO:	AV2007/0130
DIVISION:	General Division
PROCEEDING:	Appeal against annual valuation under Valuation of Land Act 1944
DELIVERED ON:	17 September 2009 (ex-tempore)
DELIVERED AT:	Gatton
HEARD AT:	Gatton
MEMBER:	Mr PA Smith
ORDER:	The appeal is dismissed.
CATCHWORDS:	Unimproved valuation – principles to be applied – building covenant - relativity – ‘evidence from the bar table’ – equity and good conscience
APPEARANCES:	Mr Goodwin appeared on his own behalf for the applicants Mr P Prasad, Lawyer, Legal Services, Department of Environment and Resource Management, appeared on behalf of the respondent

Background

1. This is an appeal by the appellants against a valuation by the respondent pursuant to the Valuation of Land Act 1944 (the VLA), which valued the appellants' property situated at 114 Gatton Laidley road, Laidley Heights, in the sum of $68,000 as at 1 October 2006.    The appellants contend for a valuation of $35,000. 

2. The subject property is located approximately 3 kilometres north-west of the township of Laidley.  The property is serviced by electricity, reticulated water and telephone.  The access to the subject is via Gatton Laidley Road and an easement located on Lot 2 SP192320. 

3. The property is an irregular shape.  It is gently elevated from the road.  A natural watercourse, which flows in an easterly direction, is located along the northern part of the property.  The land has a frontage of 98.5 metres and a depth of 163 metres.

4. The land is zoned Rural Residential under the Lockyer Valley regional council town plan scheme.  The current use is consistent with that zoning.

The Hearing

1. The appellants were represented by Mr Goodwin who gave evidence at the hearing on his own behalf.  I note that Mr Goodwin does not have any legal or valuation qualifications.  The respondent was represented by Mr Prasad a legal officer employed by the respondent and relied upon the evidence of a registered valuer, Mr M Shaw.

Legislative Provisions

1. I will now look at the relevant legislative provisions that apply to this matter.  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

   "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."

2. I note that the subject land in this matter is improved.  Accordingly, put simply, the task of the court 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.  As the then President Trickett said in the case of Fairfax v. Department of Natural Resources and Mines[1],

   "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 a property. (See Griffiths 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, '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 and presumption of correctness of valuation. 

   [1] [2005] QLC 11 at paragraphs 11 and 12

3. I now turn to s.33 of the VLA which states as follows:

   "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." 

4. This section was considered by the High Court in the case of Brisbane City Council v. Valuer-General for the State of Queensland[2] where Justice Gibbs, as he then was, made the following observations[3],

   "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.

Issues in the Appeal. 

[2] [1977-78] 140 CLR 41

[3]     At p.56

1. I now turn to the specific issues in this appeal.  To begin with the respondent has raised issues that the evidence relied upon by the appellants surpass that as set out in Exhibit 1 being the grounds of appeal.  During the course of the appeal I made rulings in this regard effectively striking out item 6 of the appellants' Exhibit 2 but leaving the rest of the material undisturbed.

2. One element that Mr Prasad for the respondent has specifically referred to relates to the reference to relativities.  This is a somewhat difficult aspect of this matter in that the evidence of the respondent in supporting the Chief Executive's valuation has referred to aspects of discount from previous valuation years and application of the 20% discount in this year.  Clearly a reference to a percentage discount has to be referenced to something and Mr Prasad has given his best endeavours to explain how that operates.

3. When valuation matters are viewed as a whole the various discounts that apply or, more particularly, the relativities that exist from property to property are those which either come about as a result of extensive valuation processes over many years or, more particularly, the extensive valuation processes combined with an objection process and determinations by the Land Court.  It is a matter of some interest to the Land Court when decisions have been made in the past by the Land Court fixing a relativity between one block and another block and the status quo has remained unchanged but in a later valuation period the department has departed from the relativity as set by the Land Court in a matter.  It is for this reason the Land Court clearly takes particular interest in ensuring that relativities that have been set in the past are maintained if other circumstances do not alter.

4. The situation in this case is somewhat different in that the relativity was not set by the court but was reached by an agreed arrangement between the parties at an objection process which is a course that the Land Court is always keen to foster between the parties.  It falls on the Court of course to determine the valuation of this matter strictly in accordance with the law and the authorities.  In this regard the evidence by Mr Shaw is clear and shows in my view that properties in 2006 of a similar nature to that of the subject, without perhaps the same level of disabilities that the subject suffers from, were being sold in the vicinity of $80,000 in value with an analysed value of $76,000.  I note in particular sale No. 2 in this regard.

5. I accept the appellants’ evidence that the amount of water that flows over sale No. 2 is less than the amount of water that flows over the subject property.  This is shown by the clear difference in the amount of council infrastructure that has been placed over the same road for drainage purposes as with respect to sale No. 2 and the subject.  That does affect as a matter of degree but of course that has to also be tempered by the fact that the gully which transverses sale No. 2 effectively cuts that property into two triangles where the gully that impacts the subject is to the northern part of the property and doesn't have the same impact of dividing the property or virtually severing the property when it comes to a usable block of land.

6. I should also point out that the Court undertook a view of the subject and sale properties and that view has greatly assisted me in consideration of this case.  I would also like to take this opportunity to commend the respondent for the clear and precise manner in which the valuation report has been presented to the Court and also to commend the appellants for the manner in which their material has been directed.  It has been presented clearly with a detailed indexing system which, despite a couple of problems I had in getting around it, was certainly far superior to the material that is often provided by lay people to the Land Court and the appellants are to be commended for the nature in which they have put that material together to assist the Court.

7. I have a legal conundrum in determining the final outcome of this matter and it is this.  The clear valuation evidence, which as regards to sale valuation is uncontested in this matter, clearly supports the valuation of $68,000.  It is also clear to me that the valuation of $68,000 does not take into account the same degree of conservative application of an unimproved value as neighbouring properties to the subject enjoy and by referring to neighbourhood I am looking at the values as set out on the Queensland Government SmartMap No. 934214222 which forms part of Exhibit 2.

8. Given the fact that the notice of appeal did not specifically refer to relativity, this would, in normal circumstances, mean that the Court could not go further to consider the matter.  However, the evidence of Mr Shaw did open this issue to some extent by referring to the previous valuation being set at the objection conference level as well as the 20% relativity being maintained to the current time.  I do not think, looking at the pure figures before me, that the 20% valuation has been maintained, but that has only come about because of, in some respects, rounding that occurs on the mass valuation process that is applied in normal circumstances in the State and the 50% increase that has been allocated as advised by Mr Prasad during submissions to this property, but noting that other properties have had an increase of something below 50% to up to 80%.  When I factor all of these matters into consideration, on a strict application of the law I find that I have little option but to affirm the value in the sum of $68,000 and the formal order of the Court will be that the appeal is dismissed and the value is set in the sum of $68,000.  However, that comes about as a result of a strict application of the law. 

1. I am going to go further than I normally would in valuation matters and make some obiter comments which the respondent may wish to take into account in this matter.  On the basis of the evidence before me which I have not indicated previously but I fully accept the truthfulness and the evidence given by both the appellant and the respondent except so far as they have differed in opinion, no doubt.  I do accept that the department has essentially accepted that the subject property should be valued in the nature of 20% lower than the surrounding properties.  I am concerned that the relativities in existence in this case and in the surrounding areas have got somewhat out of kilter and I consider it would be more appropriate if the 20% relativity basis was set with a mind to a property that does not have any of those disabilities such as the property at Lot 15 on Miles Road, a property of similar size but which, from my observations, did not suffer any of the disabilities to which the subject suffers, including the restricted access, the issues of the watercourse and the localised stormwater flooding issues which occur upstream from blockages to the drain pipes as opposed to the Lot on the other side of the road which, of course, does not suffer blockage flooding but suffers a flow-through flooding effect.  So there are differences that exist there as well.  On my simple maths, a 20% allocation, given the general relativities that exist in this area, would indicate a valuation in the order of $65,000 and I simply draw it to the respondent's attention that, despite the appellant being successful in this matter, perhaps to avoid future litigation and to retain the relativities that appear to be clearly the case between the parties in a sensible resolution of this matter some time ago, that a relativity set at that level may indeed cause future litigation to be unnecessary.  It is a matter for the department whether it wishes to avail itself of s.68 of the Valuation of Land Act to make an amendment to that valuation now, but that is a matter, of course, which I cannot make any further decision on at this stage. 

Order

1. In conclusion, the appellants have been unsuccessful in displacing the presumption of correctness of the valuation.  In those circumstances, the order must be that the appeal is dismissed.

PA SMITH

MEMBER OF THE LAND COURT