Hans & Else Grahn v. Valuer General
[1992] QLAC 47
•20 November 1992
LAND APPEAL COURT
BRISBANE
20 November 1992
Re: Appeals against determinations of the Land Court Valuation of Land Act 1944 AV90-472, AV90-473
Hans and Else Grahn
v
The Valuer-General
JUDGMENT
The two appeals originated as appeals against determinations by the Valuer- General of the unimproved value of two blocks of land (the "subject blocks") owned by the appellants, Hans and Else Grahn. The valuations were determined as at 31 March 1989.
| (a) | In the case of Lot 2 on RP 141248 in the Parish of Redcliffe, located at 56 Whytecliffe Parade, Woody Point, the valuation was $95,000 (having been reduced on objection from $100,000). The appellants contend for a valuation of $45,000. |
| (b) | In the case of subdivision 1 of Redivision 83 to 84 of Portion 111 in the Parish of Redcliffe, located at 18 Whytecliffe Parade, Woody Point, the valuation was $90,000. The appellants contend for a valuation of $40,000. |
The appeals against the Valuer-General's determinations were dismissed by a member of the Land Court. The appellants have appealed to the Land Appeal Court against those decisions.
At the hearing, Dr Hans Grahn appeared on behalf of the appellants. Mr Frank Kummer, a friend of the appellants, also spoke on their behalf. Mr R Paterson appeared on behalf of the Valuer-General. Evidence was given by Mr GP Crowley, a valuer employed by the Department of Lands.
The thrust of the appeals is that:
| (a) | each of the subject blocks suffers from certain disabilities to which the Valuer- General has paid insufficient regard in making the valuation; and |
| (b) | the valuation of each block is out of relativity with neighbouring blocks and other blocks on the western side of Whytecliffe Parade. |
Under section 16J(3) of the Valuation of Land Act 1944 the appellants bear the onus of proving each of the grounds of appeal.
It is important to bear in mind that the Valuation of Land Act 1944 (the "Act") requires the Valuer-General to make a valuation of the "unimproved value" of land. The Act defines "unimproved value" to mean, in relation to improved land (such as the subject blocks):
"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" (section 12(1)(b) - emphasis added).
In other words, when determining the unimproved value of the land, the Valuer-General must decide what the land would have been worth in the market as at 31 March 1989 without improvements such as a house, sewerage and drainage.
Before considering the grounds of appeal we will describe the main features of the
subject blocks.
The subject blocks
subject land is good.
Town water, sewerage, electricity and telephone services are available to the land.
The land is zoned "Residential A" and is used for residential purposes. It was valued as a single unit residential site.
The Valuer's Report to the Land Court described the nature of the land in the
following terms:
"The property is below road level and has a gentle fall to the rear for the first 30 metres then continues with a medium fall to the beach. Drainage is good. The land has a medium elevation and open ocean/ beach view to the east and similar but restricted (by trees) view across adjoining parkland to the north-east. The subject is affected by the land slipping towards the beach and seepage on the lower slopes."
18 Whytecliffe Parade: The subject land has features similar to those of the other block. It is, however, more of a wedge shape, having a narrower frontage to Whytecliffe Parade and a wider frontage to the beach. It has an area of 596 square metres. The land has the same services, zoning and use as the other block. The Valuer's Report to the Land Court described the nature of the land in the following terms:
"The property is below road level and has a gentle fall to the rear for about 30 metres then a medium fall to the beach. Drainage is good. The land has a medium elevation and an open ocean/beach view to the east. The subject is affected by the land slipping towards the beach resulting in damage to improvements thereon."
The descriptions of the subject blocks show that they have substantially the same features. The land at 56 Whytecliffe Parade has an area some 98.5% of the block at 18 Whytecliffe Parade. It was given a valuation some $5,000 (or 5.6%) higher than the larger block because, Mr Crowley said, of the flexibility enjoyed by that block being at the end of the street next to parkland rather than being sandwiched between two houses.
The appellants acknowledge the advantages to the subject blocks of their location and views, but draw to the attention of this Court various disabilities suffered by or on the land.
In the case of the 56 Whytecliffe Parade block, large trees in the park to its north interrupt the ocean view and drop leaves which block the gutters on the appellants' house and garage. Roots from the trees block sewerage pipes on the land. Some people using the park and beach have vandalised the appellants' fence. Indeed, the appellants submit that the neighbouring park is a disadvantage, not an advantage which enhances the value of the land. The appellants also state that rainwater flows onto that block from Arthur Street and from 54 Whytecliffe Parade, where drainage is insufficient. The noise from jet skis racing near to the beach also interrupts enjoyment of the land. Sometimes the sewerage on the land is blocked and its contents flow across the land down towards the beach.
The appellants' primary concern is that the area in which the subject blocks are located is sliding. In the case of 18 Whytecliffe Parade, that slippage has apparently caused damage to sewerage, giving rise to unpleasant smells and some contamination of the soil resulting in such things as the poisoning of plants and trees. The house was constructed before the installation of sewerage in the early 1960s. The appellants stated that, as a consequence of the block's propensity for slippage, further building at 18 Whytecliffe Parade is forbidden. Some evidence for that assertion is found in an extract from a letter to the appellants from the Redcliffe City Council dated 2 February 1990. The Council refused to approve the relaxation of By-law requirements relating to front boundary clearance to allow for the erection of a garage to within 0.15 metre of the front boundary of 18 Whytecliffe Parade. Most of the reasons for refusal related to the presence of existing facilities on the land, but reason 6 was: "The area has been subject to a recent slip failure and the approval of any further buildings or structures in this area could render the Council liable in the event of damage to the building".
The passages quoted from the Valuer's Reports earlier in these reasons indicate that the Valuer-General was aware of and had regard to the disabilities flowing from the blocks' susceptibility to slippage, and the restrictions on the views from 56 Whytecliffe Parade. That impression was confirmed by the oral evidence given to this Court by Mr Crowley. He was the valuer who prepared the Valuer's Reports for the Land Court and gave evidence to the Land Appeal Court in the appeal against the valuations of the subject blocks as at 31 March 1989. He inspected both blocks with the appellants early in 1990 to consider the objections to the valuations currently under appeal. He was aware of the sliding line (which had been mentioned in various objections over some years) and was shown cracks in concrete and pipes.
In the course of his oral evidence to this Court Mr Crowley referred to "Geotechnical Study: Landslips in the Whytecliffe Parade Area - Woody Point" prepared by NJ Morrison of Soil Surveys and Exploration Pty Ltd dated 6 November 1989, a copy of which forms part of the Court record in these proceedings. Mr Crowley observed that, although the map which is Figure 2 to the Geotechnical Study ("Location of slips Whytecliffe Parade, Woody Point") excludes some properties such as 56 Whytecliffe Parade from slip, allowance was made for slip on both properties when the valuations were prepared.
Exhibit 4 in these proceedings was a report by Coffey Partners International Pty Ltd, consulting engineers in the geotechnical sciences ("Coffey"), entitled "Landslip Investigation Scotts Point, Redcliffe" (the "Coffey Report"). The Coffey Report was commissioned by Redcliffe City Council and was dated July 1992.
The investigation was of the subdivision on the coastal or eastern side of Whytecliffe Parade (Nos 2 to 56). The Coffey Report notes that many of the houses in this subdivision are located close to steep slopes and cliffs about 10 metres to 15 metres above sea level. Earthworks and landscaping associated with the development of the subdivision have obscured any evidence of the possible old instability which is indicated by the presence of scarps at the toe and on the slope in the predevelopment photos. In about 1961 a sewer was constructed at a depth of about 2 metres between the houses and the foreshore. The locations of the sewer line and the houses (including houses on the subject blocks) are shown on Figure 1 to the Coffey Report. The site history shows that wave erosion causing undercutting of the slope and landslips is likely to have occurred prior to development of the subdivision land. The scarps at beach level are probably due to wave erosion while the scarp up the slope may be due to landslip. There were no reports of landslips between 1961 and 1967. A series of cyclone events early in 1967 scoured the beach immediately north of Scotts Point and caused erosion at the toe of the slope. An erosion scarp about 1.2 metres high at the toe of the slope extended from 16 to 22 Whytecliffe Parade. A landslip was reported to have occurred in July 1967 following a period of heavy rain. Other landslips have coincided with periods of high rainfall.
According to the Coffey Report:
"It is highly probable that landslide activities were occurring along this section of the coastline prior to settlement. Geologically, the area is a receding coastline ... The mechanism commonly involved in a receding coastline consisting of clay soils is toe erosion of steep slopes at the head of the beach followed by slope failure under conditions of high groundwater pressures, ie during and after periods of high rainfall.
Even though natural mechanisms exist which cause failures similar to those which have been experienced at Scotts Point, it is important to realise that man-made activities can contribute and, in fact, aggravate the situation so that the slopes are less resistant to the natural elements."
With respect to the impact of sewer excavation, the Coffey Report states, in part:
"The outline of the landslips shown on Figure 1 indicate that, in general, they extend upslope of the line of the sewer. In this situation the sewer excavation is likely to have had an insignificant effect on the stability of the slope as the excavation is included within the failed mass and does not form part of the failure surface ...
Based on the considerations of Landslide A it is concluded that sewer construction and leakage from the sewer would have a far less impact on the degree of stability of the steep foreshore slope than toe erosion or high ground water pressures associated with a high water table. Furthermore, the sewer was pressure tested prior to commissioning and presumably no leaks were detected and thus external forces on the sewer pipeline would be required to cause a rupture and subsequent leakage. External forces sufficient to rupture the sewer could be generated by a landslip; the head of which extends up slope of the sewer alignment for most of the landslips.
Both toe erosion and increases in groundwater pressures associated with intense rainfall have a significant impact on the degree of stability of the foreshore slope. In a situation where a slope is already only marginally stable either toe erosion or intense rainfall could trigger instability. However, from an examination of the history of this site it appears that toe erosion was a major factor in the initiation of all the landslips although intense rainfall was the final trigger for Landslips A and C."
A covering letter from Coffey to the Town Clerk of Redcliffe City Council states:
"It is concluded that the major contributing factors to landslips in the area are toe erosion and high groundwater pressures during or following periods of heavy rain. Leakage from the sewer is likely to have had a relatively small impact on stability. The recommended action with respect to the sewer line and its future integrity is to relocate a section of the sewer line upslope of the extent of the existing landslips."
Such relocation would benefit 18 Whytecliffe Parade.
Mr Crowley said that, in his view, the covering letter to the Coffey Report confirms the earlier Morrison study. It did not add to previous reports or to the Department's understanding of the situation on the subject blocks. There was no evidence in this case to compel us to think otherwise.
In our opinion, the appellants have failed to prove that the Valuer-General has paid insufficient regard to the disabilities on the subject blocks.
Relativity the subject blocks to the valuations of other blocks. Before considering the arguments and evidence put by the parties in this case it may be useful to set out some principles against which those arguments and evidence must be assessed.
The decision of the High Court of Australia in Brisbane City Council v The Valuer- General ((1978) 140 CLR 41, 5 QLCR 283) and the decisions of the Land Appeal Court in cases such as WM and TJ Fischer v The Valuer-General ((1983) 9 QLCR 44) and R and
| (a) | It is desirable that valuations made for the purposes of the Valuation of Land Act 1944 of comparable lands should bear proper relativity, one to the other, so long as the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis. (R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, at p. 16 and cases cited in it). | |||
| (b) | The best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land (WM and TJ Fischer v The Valuer-General (1983) 9 QLCR 44, at p. 46; R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, at p. 17). | |||
| (c) | Section 13(7) of the Valuation of Land Act 1944 creates a presumption that the value in money terms shown by the Valuer-General in his notice of valuation is correct (Brisbane City Council v The Valuer-General (1978) 140 CLR 41, at p. 56). | |||
| (d) | Once it is shown that: | |||
| ||||
| the presumption created by section 13(7) is rebutted (Brisbane City Council v The Valuer-General (1978) 140 CLR 41, at pp. 56-7). | ||||
| (e) | Whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence (WM and TJ Fischer v The |
The appellants fail on this point. The Valuer-General's valuation of differently situated blocks has been explained and the appellants have not shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact or that the valuation was made by a method which was fundamentally erroneous.
Second, the appellants note that, when the valuations of the subject blocks are considered on a pro rata basis there is a disparity and that there is a disparity between the valuations of those blocks and the valuations of neighbouring blocks. On the basis of the relativity maps the valuations on a per square metre basis of the three blocks to which the appellants referred are:
| (a) | 56 Whytecliffe Parade, valued at $161.84 per square metre; |
| (b) | 18 Whytecliffe Parade, valued at $151.00 per square metre; and |
| (c) | 16 Whytecliffe Parade, valued at $137.17 per square metre. |
In the appellants' submission there is no reason why two blocks with the same position and outlook should be valued at such apparently disparate rates. Blocks should be valued at the same rate per square metre. Applying the rate calculated for 16 Whytecliffe Parade to 56 Whytecliffe Parade would give the latter block a value of approximately $80,500, substantially more than the $45,000 for which the appellants contend.
The appellants fail on this point because the appropriate basis for the valuation of a residential lot is not the application of a rate per square metre but an assessment of the unimproved value of each lot as land used for single unit residential purposes. As the Land Appeal Court said in its decision on the appellants' previous appeal (H and E Grahn Order
For the reasons given, the appellants must fail in their appeal.
The appeal is dismissed and the determination of the Land Court is affirmed.
(signed Lee J)
Judge of the Supreme Court
(signed DJ Barry)
Member of the Land Court
(signed GJ Neate)
Member of the Land Court
56 Whytecliffe Parade: The subject land is a narrow rectangular block with an area of 587 square metres and an absolute water frontage on its eastern boundary. It is bounded to the north by parkland and to the south by a block of residential land with similar dimensions. At the western boundary it has a frontage to Whytecliffe Parade. The street has full width bitumen with concrete kerbing and channelling. Access onto the Disadvantages
MM Barnwell v The Valuer-General ((1989) 13 QLCR 13) are authority for the following propositions:
Valuer-General (1983) 9 QLCR 44, at p. 46).
| (f) | If possible, the Valuer-General should obtain uniformity between different blocks in the same land category or type, but should do so (preferably by reference to sales of comparable land) by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error (R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, at pp. 16-17 and cases cited in it). |
Bearing those propositions in mind, it is best to approach this case by considering first the position regarding sales evidence then considering the relativity of the valuations of the subject blocks with the valuations of comparable blocks of land.
No sales evidence was given by the appellants in these proceedings or in the Land Court proceedings. At the hearing before this Court, Mr Crowley said that he had had to go away from the immediate area of the subject blocks for sales evidence. Because the appellants bear the onus of proof they must provide any sales evidence to demonstrate that the Valuer-General's determination was wrong and that the assessment was correct. They have not done that.
The next step is to look at the appellants' arguments concerning relativity.
First, the appellants point to the lower valuations of blocks on the western side of Whytecliffe Parade and contend that it is unjust to apply such different values to properties on opposite sides of the street. As an example, they say that the block at 9 Whytecliffe Parade has the same area as the subject block across the street but has a valuation of $39,500. The appellants contend that the block has practically the same views, and no problems with sliding land and broken sewerage.
Two relativity maps tendered in these proceedings (Exhibit 5) show that the two subject blocks have values which, on a site to site comparison:
| (a) | are similar to the values of blocks adjacent to them; and |
| (b) | are substantially higher than similarly sized blocks on the opposite side of the street to them. |
Mr Crowley gave evidence that properties on the western side of the street have no elevation above the blocks on the eastern side. Unlike the eastern side blocks, which have panoramic views to Moreton Bay, the western blocks have no real views. Mr Crowley suggested that 9 Whytecliffe Parade would not have the view enjoyed from the subject block and, in the absence of the view and the frontage to the water, lacks the aesthetic appeal of the subject block.
v The Valuer-General, AV89-246 and 247, 13 December 1990):
"for the purpose of valuing residential sites, the preferable method of comparison is on a site to site basis and not on the basis of a unit area valued comparison. Site for site comparison should take into comparison such matters as the size on the lots, the situation of and access to the lots, the shape and topography of the lots etc and comparisons on a unit area basis do not necessarily reflect valuation considerations for the above features."
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