Hillberg v Department of Natural Resources and Mines
[2006] QLC 24
•10 May 2006
LAND COURT OF QUEENSLAND
CITATION: Hillberg v Department of Natural Resources and Mines [2006] QLC 24 PARTIES: Janelle E Hillberg and Leslie R Hillberg
(appellants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO.: AV2005/1913 DIVISION: Land Court of Queensland PROCEEDING: An appeal against an annual valuation of land under the Valuation of Land Act 1944 DELIVERED ON: 10 May 2006 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER Mr RS Jones ORDER: The appeal is dismissed. CATCHWORDS: Comparable sales – reliability of sales evidence – onus of proof where no sales evidence relied on by the appellants. APPEARANCES: Mr Hillberg - in person on behalf of the appellants.
Mr P Rabaa - of counsel for the respondent.
These proceedings concern an appeal by Leslie Hillberg and Janelle Hillberg (the appellants) against the assessment of the unimproved value of their land by the Chief Executive, Department of Natural Resources and Mines (the respondent), pursuant to the Valuation of Land Act 1944 (VLA).
Background:
The subject land is located on the corner of Farrell Street and Yates Avenue, Ashgrove and is more properly described as Lot 1 on Registered Plan 83291, Parish of Enoggera, County of Stanley. Ashgrove is an established residential suburb approximately 6 km from the Brisbane CBD.
The land comprises an area of 584 square metres and is designated "Low Density Residential (LR)" under the Brisbane City Plan 2000. Farrell Street and Yates Avenue are both bitumen sealed with concrete kerbing and channelling and all the usual urban services and amenities are available to the land.
Improvements on the land consist primarily of a post-war timber and brick highset dwelling. There is no suggestion that the highest and best use of the land is for any use other than single residential dwelling purposes.
The appellants appealed the respondent's assessment of the unimproved value of the land determined as at 1 October 2004 (effective as at 30 June 2005) in the amount of $310,000. In their Notice of Appeal the appellants estimated the unimproved value to be $250,000. Following the appellants' objection to the original valuation, the respondent revised its assessment downwards to $295,000 effective as at 1 October 2004. Accordingly, for the purposes of this appeal, the contest was between the appellants' assessment of $250,000 and the respondent's assessment of $295,000.
The appellants were represented by Mr Hillberg who was also the only witness called on their behalf. The respondent was legally represented by Mr P Rabaa of counsel and relied on the evidence of Mr Scott Lanchester, a registered real estate valuer also employed by the respondent.
Issues in the Appeal
The unimproved value of the subject land, being improved land, is to be assessed in accordance with s.3(1)(b) and s.3(2) of the VLA which relevantly provide:
"3. (1) For the purposes of this Act –
‘unimproved value’ of land means –
(a)…
(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)However, the unimproved value shall in no case be less than the sum that would be obtained by deducting the value of improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this Act."
Pursuant to s.33 of the VLA the valuation appealed against is deemed to be correct until proved otherwise. Further, pursuant to s.45(4), the burden of proving every ground of appeal relied on also lies with the appellants. In Brisbane City Council v The Valuer-General[1] 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.
[1](1977-78) 140 CLR 41 at 56-57: See also G Cominos & Co v Chief Executive, Department of Lands (1996-97) 16 QLCR 311 at 331-332 (LAC).
In their Notice of Appeal the appellants identified four negative characteristics of their land which they say the respondent failed to take into account or failed to take sufficiently into account. The first of these characteristics is the topography of the land which they say causes drainage problems, including actual flooding of parts of the dwelling, erosion and, in some instances, structural damage to concrete slabs and retaining walls.
The second and third involve the impact of increased volumes in traffic, particularly from Wardell Street (which is a major four lane arterial road) and the changing residential character of the area. The appellants say that increasing traffic volumes have resulted in congestion and noise and air pollution and that what was once a quiet established residential area has, over time, become more of a rental area with younger and rowdier residents. The last matter raised is the detrimental impact on views and amenity resulting from recent development across the road.
The case for the respondent is that the unimproved value attributed to the land is reasonable and well supported when regard is had to what Mr Lanchester considered to be reliable sales evidence. In this context, Mr Lanchester had regard to four vacant or lightly improved land sales in Ashgrove showing prices ranging from $242,000 to $280,000. Mr Lanchester also had regard to a sale of land in the nearby suburb of Alderley for $380,000. According to him, this sale involved an older dwelling structure which was always intended to be demolished by the purchasers to make way for a new dwelling.
It is now well recognised that in appeals such as this, in ascertaining the unimproved value of land, usually the best evidence is that of sales of vacant or lightly improved comparable parcels of land.[2] In the circumstances of this appeal, where the appellants have not had regard to sales evidence, it is my opinion that they can only succeed if it is shown that the sales relied on by Mr Lanchester are in fact not sufficiently comparable or that they have been incorrectly analysed and/or have been incorrectly applied to the subject having regard to the matters raised by the appellants in their grounds of appeal.
[2] e.g. PH Clough v Valuer-General (1981-82) 8 QLCR 70 at 76
In this context I accept the evidence of Mr Hillberg concerning the extent of the drainage problems faced by the appellants and the inconveniences and disturbances caused by passing traffic. I also accept the unchallenged evidence about the impact on amenity caused by there now being more rental properties in the area. As it turned out construction of the building across the road, which was said to affect views and amenity, was not finished until about November 2005 some 12 months after the relevant valuation date. Further, there was no evidence as to what information might have been reasonably available in the market place concerning the construction of that building as at 1 October 2004. Accordingly, this part of the appellant's evidence, while it might be relevant to any subsequent statutory valuation, lost most of its relevance to this appeal.
In support of his case, Mr Hillberg also relied on two documents authored by others. The first of these was a Certificate of Insurance (Exhibit 4). This document, according to Mr Hillberg, was an estimate of the replacement value of the improvements on the land for insurance purposes. Under the heading "Home Building" the stated figure was $191,000. The author of this document and his or her qualifications are unknown. The second document (Exhibit 5) was prepared by a Ms Devine who, according to her business card, was a "sales associate" for the Paddington office of the Re/Max Real Estate agency. Ms Devine carried out a "home appraisal" which placed a value of $375,000 on the land and improvements thereon as at 20 April 2005. Mr Hillberg did not know what, if any, formal qualifications Ms Devine had. Neither Ms Devine nor the author of Exhibit 4 were called as witnesses.
It was Mr Hillberg's contention that the assessment of the market value of the land and improvements ($375,000) less the estimated replacement cost or value of the improvements ($191,000) supported his case, namely that the assessment of the unimproved value of the land by the respondent was excessive.
However, in my opinion, the "replacement" value or cost of the improvements on land for insurance purposes need not be the same or even close to the "…value of improvements…" for the purposes of s.3(2) of the VLA. As to Exhibit 5, it would appear that it was prepared by Ms Devine in the hope of gaining the property as a sale listing at some time in the future. No evidence was led to say whether or not Ms Devine's appraisal was accurate, overly optimistic or too conservative.
In all the circumstances of this appeal, it is my opinion that little weight can be given to these documents in assessing the unimproved value of the land. At face value alone the relevance and reliability of the documents is questionable, particularly in respect of Exhibit 4. The fact that the authors of the documents were not called to explain and substantiate their conclusions weakens further the value of this evidence. In this context I agree entirely with the reasoning of the Land Appeal Court in Department of Natural Resources and Mines v QNI Metals Pty Ltd & Anor (2002) 23 QLCR 261 where at 267 the Court said:
"In any event, even if they might have been relevant, we consider that valuations of this nature will rarely be any assistance to the Court in determining the unimproved value of land pursuant to the Valuation of Land Act, unless the valuers who wrote the reports are called to give evidence in support of the valuations."
In conclusion, it is my opinion that the appellants have not demonstrated that the valuation appealed against was excessive having regard to the relevant matters raised in their Notice of Appeal. Apart from Mr Lanchester's sale four there was no serious challenge as to the reliability of the sales evidence relied on by him in assessing the unimproved value of the land. The appellant's attack on Sale Four was based primarily on it being located too far away from the subject to be relevant. While I am prepared to accept that this sale is less reliable evidence than the other sales relied on by Mr Lanchester I am not prepared to discount its relevance entirely.
At the end of the day I am satisfied, and so find, that Mr Lanchester had regard to reliable sales evidence which he properly analysed and applied in his valuation exercise concerning the subject land. In reaching this conclusion, it follows that I am also satisfied that Mr Lanchester had proper regard to the relevant matters raised by and relied on by the appellants in this appeal.
For the reasons canvassed above, I have reached the conclusion, and so find, that the appellants have failed to prove that the respondent's assessment of the unimproved value is wrong and should be reduced.
Accordingly, the appeal must be dismissed.
Order:
The appeal is dismissed.
RS JONES
MEMBER OF THE LAND COURT
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