Gorman v Chief Executive, Department of Lands

[1996] QLC 57

[1996] QLC 57

 

BRISBANE

17 MAY 1996

In the matter of an appeal against a valuation.
  Valuation Roll No:     24195/15000
  Local Authority:        Maroochy (V95-36)

John G and Wendy L Gorman
  v.
  Chief Executive, Department of Lands

D E C I S I O N

This is an appeal under the Valuation of Land Act 1944 involving the question of the unimproved value that should be placed on the subject land as at 30 June 1993. The matter arises following the purchase of the subject land by the appellants from a new subdivision. The original value placed on the land by the Chief Executive was $80,000. This was objected to by the appellants who contended for a value of between $35,000 and $40,000 and following the objection the Chief Executive's value was reduced to $75,000. It is from this objection that the landholders appealed to this Court.
           John Griffin Gorman appeared for and gave evidence on behalf of the appellants, whilst the Chief Executive gave evidence through Damian Peter Hyde, a registered valuer in the employment of the Department of Natural Resources (which includes the previous Department of Lands).  The subject land comprises a lot in the Parish of Maroochy, County of Canning, comprising 6,701 m², being situated approximately 5 km east from the township of Yandina in the rural residential precinct of Valdora.  Access to the property is easy and direct along Karnu Drive which is a full width bitumen sealed concrete kerbed and channelled roadway.  Mr Hyde described the subject land thus:  "The land slopes from road level to the northeast and consists of hard forest country.  Panoramic rural and sea views are obtained from the site which affords a reasonable homesite at its south western extremity".
           Where Mr Hyde says "the land slopes", Mr Gorman would suggest that the word "steeply" ought to be inserted.  During oral testimony Mr Hyde agreed with the suggestion.       The appellants purchased the subject land for $84,000 in about September or October 1994.  They obtained engineering advice regarding the cost of building a home on the land and were somewhat dismayed at what they were advised it would cost them to prepare the site for the construction of a house.  Based on this information, the appellants attempted to escape from the obligation to purchase the land, however, this was not possible and so the transaction was completed.  Mr Hyde concedes that the block has rock, having described it as "hard forest country". 
           In support of the appellants' contention that the value to be placed on the subject land ought to be in the vicinity of $35,000 to $40,000, Mr Gorman referred generally to valuations placed on other parcels of land by the Chief Executive in a number of locations on the Sunshine Coast and hinterland.  He referred to two blocks in an area known as the "Golden Triangle" valued at $61,000 and $65,000 respectively, both having ocean views.  He also mentioned the home unit that he and his wife had occupied before moving to Buderim which had been valued at about $40,000 at the relevant date and $44,500 in the more recent valuation.  In addition to this material, Mr Gorman referred to other blocks which had sold and which had unimproved values placed on them as follows: one sold for $145,000 and had been valued at $102,000 by the Chief Executive; two had sold at $60,000 each and had values of $75,000 and $87,000 placed upon them; one had sold at $135,000 and had been valued at $102,000, whilst another had sold at $123,000 and had been valued at $102,000.  In addition to this evidence, Mr Gorman tendered a schedule which listed a number of sales, including some in the rural residential estate in which the subject land is to be found and unimproved values placed upon the sale blocks by the Chief Executive.  It was Mr Hyde's understanding that the unimproved values included on the schedule were as at the date of 1 January 1995.
           Mr Gorman's major concern was that in having looked at the evidence that he had available to him, he could not discern any consistency between values struck by the Chief Executive nor could he conclude that the value placed on the subject land by the Chief Executive could be sustained.
           The practice of land valuation is an exacting one involving not only professional qualifications and skills but also access to relevant market information and experience in the area under consideration.  It is not surprising then that Mr Gorman has had difficulty in understanding how the valuation might be struck, however, reference to a couple of cases may be of some assistance albeit a glimpse only of the larger canvas of the practice of valuation.
           The first authority that I will refer to is Spencer v. Commonwealth (1907) 5 CLR 418 where, in his judgment, Griffith CJ said at 432:-

"In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, that is, whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?'  It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural.  The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together."

Another useful case is found in Riverbank Pty Ltd v Commonwealth (1974) 48ALJR483 where the Court said that use of sales evidence was "the conventional valuation" method and in this regard sales of similar land around the relevant date and in the same locality are clearly to be preferred.
           Mr Hyde in his valuation referred to two sales located in Karnu Drive, a short distance from the subject, and his comparisons with these sales indicated to him that an unimproved value for the subject of $75,000 was appropriate.  I have studied the sales evidence referred to by Mr Hyde and agree with him that they are relevant sales and that his comparisons do lead to a conclusion that $75,000 should be the unimproved value of the subject land. 
           By comparison with Mr Hyde's method, Mr Gorman's approach is too generalised and imprecise and of no real assistance to me in deciding the matter.  It would be an immense if not impossible task for one to rationalise consistency in values between blocks of land located at the various localities mentioned by Mr Gorman and, I might add for the purposes of striking a valuation, would be a fruitless exercise.
           I conclude that the valuation placed upon the subject land by the Chief Executive should not be disturbed and that the appeal should therefore be dismissed.

RP SCOTT
  MEMBER OF THE LAND COURT