Hinks v Chief Executive, Department of Natural Resources
[1997] QLC 53
•24 April 1997
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LAND COURT
BRISBANE
24 April 1997
Re: Appeal against Annual Valuation
Roll No . 11993 Local Government of Hervey Bay
(AV96-123)
KA Hinks
v.
Chief Executive, Department of Natural Resources
(Heard in Hervey Bay)
Introduction
The appellant, Keith Adrian Hinks, owns Lot 64 on RP159636 in the Parish of Urangan, County of March, a parcel of land in Doolong Road, Hervey Bay (the “subject land”). In the annual valuation of the area as at 1 January 1995 the respondent assessed the unimproved value of the subject land to be $48,000. The appellant objected. His objection was disallowed. He appealed to the Land Court, estimating that the unimproved value of the subject land was $40,000. His grounds of appeal were as follows:
“The annual valuation of my land has risen from $38,000 to $48,000 since 1993. Within this period several neighbouring vacant allotments have continually displayed `For Sale’ signs and none have sold. I suggest this is because our allotments have no sewerage, no kerbing or channelling, no pedestrian facilities, inadequate stormwater drainage and street lighting. The current upgrading of our local airport will generate more air traffic and subsequent increase in noise pollution. This will also detract the value of my property.
Any further rise in my land valuation could not be justified until the local authority addresses the abovementioned problems.”
The Valuation of Land Act 1944 defines “unimproved value” of land to mean, 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 at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist” (section 3(1)).”
Such a valuation is made having regard to the condition of surrounding properties (whether improved or not) and the nature of services available to the subject land (such as access by road and the availability of telephone and electricity to the land) at the relevant date of valuation.
Section 33 of the Valuation of Land Act 1944 states:
“Any and every valuation, or alteration of the valuation of any land made ... under the Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.”
That section creates a presumption that the value in money terms shown by the respondent in his notice of valuation is correct. The decision of the High Court of Australia in Brisbane City Council v Valuer-General ((1978) 140 CLR 41 at 56) is authority for the proposition that, once it is shown that:
(a)in making the valuation the respondent acted upon a wrong principle, or made a serious error of fact; or
(b)the valuation was made by a method fundamentally erroneous,
the presumption created by section 33 is rebutted.
Section 45 of the Valuation of Land Act 1944 provides that an appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner.
At the hearing Mr Hinks appeared on his own behalf and gave evidence about the subject land and the matters set out in his notice of appeal. Valuation evidence was given on behalf of the respondent by Mr DR Gaedtke, a valuer employed by the Department of Natural Resources.
The subject land
The subject land is a rectangular parcel of land with an easy cross slope and an area of 4,074 square metres. It is situated on Doolong Road, a bitumen sealed carriageway with gravel shoulders and earth drains, well to the east of the intersection with Denmans Camp Road. It is a quieter part of the street than the part west of that intersection and it also carries less traffic than Denmans Camp Road. Good access is available to the land. Town water, electricity and telephone services are also available. The land was zoned Park Residential and is used for residential purposes. It is in a residential area and was valued as an unimproved residential site.
Mr Hinks said that, since he acquired the land eight years ago, services to the land have not improved. He cannot see an appreciation of 77% in the value of the land when no additional services have been provided. In particular he noted that there is an open drain at the low end of Doolong Road, less than 200 metres from the subject land. The drain is, apparently, in disrepair and is overgrown and may be the haunt of vermin. It overflows in heavy rain. There was no suggestion that the subject land was in danger of flooding at such times but it was suggested that the presence of the drain (albeit some distance from the subject land) detracts from the value of the property. Mr Gaedtke agreed that the watercourse was overgrown and may the habitat for vermin, but noted that, unlike some blocks in nearby Kathleen Crescent, the subject land does not back onto the watercourse.
Mr Hinks has apparently made many requests to the Hervey Bay Council for action to provide new services and improve existing services, such as sewerage, roadside kerb and guttering and stormwater drainage. He provided the Court with a letter to him dated 13 September 1995 from the Manager, Investigations and Design, in the Engineering Services Department of Hervey Bay City Council (Exhibit 3). In it the author referred to Mr Hinks’ concerns regarding drainage problems in the section of Doolong Road east of Denman Camp Road. The letter continued:
“This section of Doolong Road is included in the study area of the recently completed Kawungan/Wondunna Stormwater Drainage Strategic Planning Report. It is considered that merely constructing kerb and channelling may not rectify the problems you are experiencing and as a consequence, has been listed for further investigation.”
I have inspected the subject land from the street and accept the thrust of Mr Hinks’ evidence about the features of the subject land and its locality. But that alone does not mean that the respondent’s valuation of the subject land as at 1 January 1996 is wrong.
Mr Hinks listed the valuations of the subject land from 1992 to 1996 in the following table to show the various increases from year to year.
1992/93 ............$27,000
1993/94 ............$38,000 up 40% on the previous year
1994/95 ............$42,000 up 10% on the previous year
1995/96 ............$46,000 up 10% on the previous year
1996/97 ............$48,000 up 5% on the previous year (Exhibit 2).
He noted that real estate values have been depressed in recent years and he suggested that the market had stagnated.
As has often been noted, the best basis for the assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land. In his valuation report (Exhibit 4) Mr Gaedtke referred to 2 sales of land in the locality by reference to which the subject land had been valued. I turn now to that evidence.
Sales evidence
Sale 1 is a rectangular parcel of land, Lot 2 on RP142564, on Denmans Camp Road. It has an area of 4,067 square metres. Although it appears to be a fairly level block, Mr Gaedtke described it as low lying and said that earthworks were required to develop the site (or a building would have to be constructed on stumps). The land is on a relatively busy street. At the time of its sale there was no concrete kerbing and channelling along the street frontage (although such improvements have since been made). Mr Gaedtke described the land as inferior to the subject land because of its topography and location. It was sold in June 1995 for $48,000. The analysed and applied value was $46,000. Mr Hinks was familiar with the property and knew of the builder purchaser who built a house on it. He did not dispute the description of the land or the assessment of its relative value to the subject land.
Sale 2, Lot 2 on RP809440, is a hatchet shaped block off Doolong Road, to the west of the intersection with Denmans Camp Road. It has an area of 4,249 square metres, but at least 1,200 square metres of that is taken up with the driveway. The land is level. There is currently kerbing and channelling at the street frontage, but it is not clear whether it was there when the land was sold. Mr Gaedtke described the sale land as slightly inferior to the subject due to shape, useable area and the additional costs of developing it. Mr Hinks was aware of the sale land and described it as a higher block than the subject land, which is at the lower end of Doolong Road. In his opinion it was a better block than the subject with better services to it. The house site does not front onto the road, something which he saw as an advantage given that that part of Doolong Road is fairly busy with vehicular traffic. It would, however, be more expensive to bring services from the street to the house site. Having viewed the subject and sale lots I am content to accept Mr Gaedtke’s expert opinion as to their relative values. The Sale 2 land was sold in September 1995 for $52,500. The analysed value was $50,000 and the applied value was $47,000.
The sales evidence supports the valuation of the subject land at $48,000.
Mr Gaedtke also stated that:(a)although, as the appellant contended, there were “For Sale” signs on land in the district, the best evidence of value is the sale of properties comparable to the subject land;
(b)the relevant valuation date (1 January 1996) was in a subdued period following a buoyant market in 1994-95, but there has been an increase in values since 1989-90 as Hervey Bay has grown, and there is still a market for larger properties such as the subject land;
(c)the lack of facilities and services available to parcels of land was reflected in the sales evidence, and due allowance was made for this in the valuation of the subject land.
Other issues
Although the matters mentioned above provide the basis on which the appeal is to be decided, it appropriate to refer to the other matters raised by Mr Hinks.
First, Mr Hinks referred to a property appraisal recently carried on on his improved property indicates that the property would sell for a price approximately $45,000 less than what he has spent on it and approximately $50,000 less than actual replacement value. He cited the sale in recent months of two improved properties in Doolong Road at prices which he described as a “loss on current replacement value” of $40,000 to $50,000. Other neighbouring properties have apparently been offered for sale but have not sold due to poor demand and poor market sales.
The fact that some parcels of land did not sell is of little evidentiary value when compared with evidence of sales of comparable blocks of unimproved land. It is sufficient to add that the Land Court and Land Appeal Court have consistently taken the approach that sales of unimproved, rather than improved, land are to be preferred as the best guide for arriving at an unimproved value. The reason for that approach is that there is no room for error in analysing the value of the improvements (see Clough v Valuer-General (1981-82) 8 QLCR 70 at 76 (LAC) quoted with approval in Barnwell v Valuer-General (1989) 13 QLCR 13 at 17 (LAC)).
Second, Mr Hinks submitted that another contributing factor for the falling demand and value of his property would be the recent upgrading of the Hervey Bay airport. The upgrading, he stated, promises to bring more air traffic and noise pollution to his property as the aircraft approach path to the airstrip is directly over his house.
This item in the grounds of appeal and Mr Hinks’ submission seem to contemplate the future effect of the upgraded airport. I do not understand Mr Hinks to be submitting that the upgrading necessarily had the effect of devaluing his property as at 1 January 1996. Even if that was his submission, I agree with Mr Gaedtke that the implications of increased noise from aircraft approaching the airport would be common to a large area, not just the subject land or its immediate neighbours.
Conclusion
The evidence supports the valuation made by the respondent. Although the appellant has proved the grounds of appeal, he has not shown that in making the valuation the respondent acted upon a wrong principle or made a serious error of fact, or that the valuation was made by a method fundamentally erroneous. Consequently, the appeal must fail.
Order
The appeal is dismissed and the determination of the Chief Executive in the amount of $48,000 is affirmed.
GJ NEATE
MEMBER
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