Haseler v Department of Natural Resources and Water

[2009] QLC 95

LAND COURT OF QUEENSLAND

CITATION:	Haseler v Department of Natural Resources and Water [2009] QLC 0095
PARTIES:	Dianne M and Jon M Haseler (appellants)
v.
Chief Executive, Department of Natural Resources and Water (respondent)
FILE NO:	AV2008/0195
DIVISION:	Land Court of Queensland, General Division
PROCEEDING:	An appeal against an annual valuation of land under the Valuation of Land Act 1944
DELIVERED ON:	7 July 2009
DELIVERED AT:	Brisbane
HEARD AT:	Brisbane
MEMBER:	Mr RS Jones
ORDER:	The appeal is dismissed.
CATCHWORDS:	Unimproved valuation of land – s.3 Valuation of Land Act 1944 – use of comparable sales – presumption of correctness of valuation appealed against – s.33 of VLA – relativity of unimproved values
APPEARANCES:	Mr P Thomas, Acquisitions Manager for QM Properties, as agent for the appellants Mr W Isdale of Counsel instructed by Ms T Johnson for the respondent

Background

1. The appellants have appealed against the assessment of the unimproved value assigned to their land by the respondent, the Chief Executive, Department of Natural Resources and Water.  The appellants are the registered proprietors of a parcel of land located at 13 Quarry Street, Hamilton, more properly described as Lot 2 on Survey Plan 139989, Parish of Toombul, County of Stanley. 

2. The unimproved value determined by the respondent as at 1 October 2007 is $1,700,000.  In support of this figure the respondent relies on the valuation[1] of Mr D Buchanan, a registered real estate valuer employed by the respondent.  Mr Buchanan was not the valuer who originally valued the land.  The appellants’ original estimate of the unimproved value of their land was $700,000.  However, at the hearing of the appeal and relying on the valuation[2] of Mr C Early, also a registered valuer, the appellants contended for a figure of $1,150,000. 

   [1]     Exh.3.

   [2]     Exh.2.

3. The subject land is, as I have already said, located in the suburb of Hamilton approximately 4-5 km (radially) from the Brisbane Central Business District area.  The land comprises an area of 520m² and all the usual urban services and amenities are readily available.

4. The land is located within a Character Residential Area and a Demolition Control Precinct of the Brisbane City Plan 2000.  Notwithstanding these designations the land is currently improved with a modern three storey rendered brick dwelling and, consistent with its land use designation, is being used for residential purposes.  No doubt the construction of the modern dwelling on the land, at least to a significant extent, led Mr Early to form the view that the aforesaid classifications did not adversely restrict “the subject property’s highest and best use potential in an unimproved state”.[3]

   [3]     Exh.2 p.4.

5. The notice of appeal identifies eight separate grounds of appeal.  The first two grounds are broad and generic in terms.  The remaining grounds fall into three categories which could be broadly described as being:

   (i)the valuation fails to take into account the physical constraints of the land which adversely impact on its use and/or the cost of developing the land to achieve its highest and best use;

   (ii)the valuation of the respondent is otherwise excessive having regard to comparable sales evidence;

   (iii)the unimproved value contended for by the respondent is excessive when regard is hand to the unimproved values attributed to other land in the vicinity of the subject.

6. As the subject land is “improved land” for the purposes of the Valuation of Land Act 1944 (VLA) both valuers agree that it should be valued in accordance with s.3(1)(b) of that Act. For the purposes of this appeal that section relevantly requires the valuers to proceed on the basis that as at the date of valuation the improvements on the land did not exist. However, that presumption does not require the valuers to also assume that the improvements on the land had never been made. (s.3(2C))

7. Pursuant to s.33 of the VLA the valuation appealed against is deemed to be correct and therefore the appellants bear the burden of proving that it is wrong. Further, pursuant to s.45(4) of the Act, the burden of proving every ground of appeal relied on also lies with the appellants. In Brisbane City Council v The Valuer-General[4] Gibbs J, as he then was, in delivering the leading judgment of the High Court considered that the presumption in favour of the correctness of the statutory valuation may be rebutted where it can be shown that the valuation was based on a wrong principle and/or involved a significant error of fact and/or was made by a fundamentally erroneous method.

   [4] (1977-78) 140 CLR 41 at 56-57.

8. In his valuation Mr Early relies on a comparison between the unimproved value attributed to the subject land and the unimproved values attributed to three other parcels situated at 81 Markwell Street, 15 Quarry Street and 11 Quarry Street, Hamilton.  The second of those properties is also one of the sales relied on by Mr Early in his valuation.  While the evidence concerning relativity will be dealt with in more detail below it has been said on a number of occasions that usually the best evidence for the assessment of the unimproved value of a parcel of land is that of sales of vacant or lightly improved comparable lands which have occurred at or about the relevant date of valuation.[5]

   [5]     For example, Fischer v Valuer-General (1983) 9 QLCR 44 at 46 (LAC) and Grahn v Valuer-General (1992-93) 14 QLCR 327 at 328-329 (LAC).

Credit Issues

1. During the course of these appeals, attacks were made on the credit of both valuers by those representing the parties.  The attacks were not so much directed at establishing that they were untruthful witnesses but more towards them being biased and lacking objectivity.

2. I reject those attacks.  Save where expressly dealt with below I found both valuers to be essentially creditable witnesses.

The Sales Evidence

1. In total the valuers relied on seven sales located in the general area of the subject.  Of these sales, only three were common to both. 

2. Dealing first with Mr Buchanan’s first and fifth sales, I reject them as being reliable evidence of value.  I accept Mr Early’s evidence to the effect that these sales are located in an area of Hamilton perceived by the marketplace to be more prestigious in character.  The sale prices of these properties tend to confirm Mr Early’s opinion about this.

3. In respect of the sales at 6 Langside Road[6] and 9 Langside Road[7] I prefer the evidence of Mr Buchanan and find that these sales are inferior and not superior to the subject.  Both are of a lower elevation, have inferior views and, in the case of 9 Langside Road, probably required fill. 

   [6]     Mr Buchanan’s sale 2; Mr Early’ sale 2.

   [7]     Mr Buchanan’s sale 3; Mr Early’s sale 4.

4. Turning then to the sale at 48 Hillside Crescent[8] again I prefer the evidence of Mr Buchanan to that of Mr Early.  Accordingly I also find this sale to be inferior to the subject notwithstanding its location in the prestigious Hillside Crescent address of Hamilton.  In relative terms, it is materially smaller and narrower from the subject and, in my opinion, Mr Early has tended to underestimate the risk that views from this site might be restricted by future development.

   [8]     Mr Buchanan’s sale 4; Mr Early’s sale 3.

5. The evidence concerning these three sales is sufficient to identify that Mr Early’s valuation of $1,150,000 is an underestimate of the unimproved value of the subject land.  In this regard I consider that Mr Early was handicapped in the preparation of his valuation because of the time constraints he was placed under.[9]

   [9]     T.18–19 and T.48.2.

6. The remaining two sales that have to be considered are those relied on by Mr Early located at 12 Whyenbah Street (sale 1) and 15 Quarry Street (sale 5).

7. According to Mr Early the subject land, in comparison to 12 Whyenbah Street is only “slightly superior”.  I disagree.  This sale is inferior to the subject in a number of important respect.  It has no street frontage (access being by way of an easement over adjoining land), has inferior river views and, unlike the subject, has no views of the Brisbane central business district.  These negative aspects outweigh the benefits associated with any additional privacy the sale land might enjoy.  This sale does not support Mr Early’s valuation.

8. The last sale relied upon by Mr Early is that at 15 Quarry Street.  This land adjoins the subject immediately to the west. 

9. Mr Buchanan’s approach to this sale causes me some concern.  On the face of it, it would ordinarily be expected to provide probative evidence of the value of the subject land.  The evidence of Mr Buchanan was to the effect that it was not relied on because it was seen as an “improved sale”.[10]  However, in cross-examination Mr Buchanan seemed to concede that in the respondent’s original valuation exercise(not carried out by him) this sale might well have been used with an allowance of $370,000 being made for the improvements on the land.[11]  The sale price of $1,670,000 less $370,000 being the unimproved value assigned to the land.

   [10]     T.56.6.

   [11]     T.65.6-T.65-9.

10. If the value of the improvements is stripped away leaving a notionally vacant land value of about $1,300,000 how could the subject land be worth $400,000 more?

11. In examination-in-chief Mr Buchanan’s evidence was that if this sale could have been treated as being one for residential development, an additional allowance of $50,000 to $60,000 for development costs and approvals would result in an effective vacant land value of $1,700,000 “or so”.[12] 

    [12]     T.56.4-T.56.8.

12. This evidence would tend to suggest that Mr Buchanan saw the value of this land and the value of the subject being broadly equal.  However, in cross-examination, Mr Buchanan’s evidence became somewhat inconsistent if not contradictory.  First, there was a suggestion that the unimproved value assigned to the sale land might have been too low.[13]  Next, that the sale was not comparable at all but inferior largely because of its shape, narrow street frontage, access difficulties and inferior views.[14]  As to the issue of views, it is not at all clear that the views from a building site on the land would be significantly inferior to that from the subject given its higher elevation.[15]  Also, when considering the other negatives associated with the sale, it has to be kept in mind that in relative terms it is materially larger than the subject.

    [13]     T.70.8.

    [14]     T71.4 and T.78.

    [15]     T.71.5-T71.6.

13. I found much of Mr Buchanan’s evidence concerning this sale unconvincing.  However, no doubt due to Mr Thomas’ inexperience as an advocate, most of his evidence on these matters was not effectively challenged. 

Relativity

1. As I have already said, apparent inconsistencies in the unimproved values the respondent assigns to other lands in the area, in comparison to that assigned to the subject, will not be sufficient to displace the valuation appealed against when it can be supported by reliable sales evidence. 

2. Mr Early relied on the unimproved values assigned to three other blocks in Quarry Street to show that the valuation appealed against was excessive.[16]  Save for the evidence concerning 15 Quarry Street I do not consider this evidence assists the case for the appellants.

   [16]     Exh.2 p.10.

3. Turning then to the unimproved value assigned to 15 Quarry Street, having regard to the evidence and matters referred to above, I am left with the impression that either this land has been slightly undervalued by the respondent or the subject has been slightly overvalued, but I cannot say which of these scenarios is more probable than the other.

4. Suspicions about the correctness of the valuation appealed against are not sufficient. The appellants are required to prove, on the balance of probabilities, that it is wrong. In the circumstances of this appeal I have come somewhat reluctantly to the conclusion that the appellants have failed to rebut the presumption of correctness afforded to the valuation pursuant to s.33 of the VLA. The appellants have failed to prove that the valuation appealed against was based on a wrong principle and/or involved a significant error of fact and/or was made by a fundamentally erroneous method.

5. For the reasons set out above the appeal must be dismissed.

Order

The appeal is dismissed.

RS JONES

MEMBER OF THE LAND COURT