Jaffe v Chief Executive, Department of Natural Resources and Mines - [2002] QLC 15

LAND COURT

BRISBANE

28 February 2002

Re: Appeal against annual valuation

Valuation of Land Act 1944
  Property ID No:        9173179
  Local Government:    BCC-Sherwood
  (AV2001-0155)

Vivianne G Jaffe

Chief Executive, Department of Natural Resources and Mines

J U D G M E N T

Background:

This matter relates to land located at 7 Laurel Avenue, Chelmer and described as Lots 1 to 3 on RP 900681, Parish of Oxley. The subject land has an area of 3,023 m² and is located about 10 kilometres by road from the City centre, and about 2 kilometres south of the major regional shopping centre at Indooroopilly Shopping Town. There are also local shops about 0.8 kilometres south of the subject land, and schools, bus services, and the main Ipswich railway line are in close proximity. The subject land fronts both Longman Terrace and Laurel Avenue, both of which are bitumen sealed with concrete kerbing and channelling. All normal utility services are available.
The subject land is zoned Low Density Residential, under the Brisbane City Town Plan effective at the date of valuation of 1 October 2000. The key issues are the nature of the land, impacts of traffic and noise, relativity, changes in the valuation, and comparisons of sales.
On 27 March 2001, the Chief Executive issued a valuation of the subject land at $600,000. Following an objection the Chief Executive confirmed that figure on 29 May 2001. The appellant has subsequently appealed claiming the unimproved value should more properly be $388,000. Following a court supervised preliminary conference on 3 September 2001, the Chief Executive amended the unimproved value under Section 68 to $550,000 on 21 September 2001. At the hearing on 11 December 2001 the appellant was granted leave to amend her estimate of the unimproved value to $400,000, which is the amount now claimed.
John McAuliffe, an experienced valuer appeared and gave evidence for the appellant, also calling evidence from John Jaffe. Miss R Trigge, Principal Legal Officer appeared for the respondent, calling evidence from Daniel O’Connor, the experienced departmental registered valuer responsible for determining the valuation.
The evidence:
The nature of the land -
The subject land is a regular shaped corner parcel with frontage of 52 metres to Laurel Avenue and 36 metres to Longman Terrace. It is located at about road level, and Laurel Avenue lies along a ridge line parallel to the Brisbane River, which is about 150 metres west of the subject land. However the subject land has no views of the waters. Access to the land is good.
Laurel Avenue is a prestigious residential area, containing older and renovated prestige homes, in high demand in the market place. The subject land contains a well preserved historic building, which was formerly the WR Black Home for Children. Constructed in 1889 for an early resident of Chelmer (Sutton), the home reflects the architecture of one of Brisbane’s leading architects of that era (Addison), and is currently the subject of an application for Heritage Listed by the owner.
There was no heritage listing upon the land at the relevant date. However because of its Character Housing nature, and its contribution to the pleasant streetscape in Laurel Avenue, Mr McAuliffe argues that it was unlikely that the old building could be removed for redevelopment purposes. For that reason he argues that any higher purpose beyond a single occupied home site must be disregarded. Mr O’Connor agrees with that conclusion, and he has valued the total site under s. 17 as a single dwelling site, occupied by a heritage like building. He was also aware of several large significant ornamental trees which impact the site.
Adjoining the subject land to the south is the Queensland Police College training establishment. Laurel Avenue and Longman Terrace are now heavily impacted by morning commuter traffic seeking to avoid congestion along the parallel Honour Avenue and its approaches to the Indooroopilly Bridge. The subject land has had considerable filling (about 1,500 cubic metres) to bring it to its current well developed state. The two vacant parcels adjoining the subject land to the north at 18 and 20 Sutton Street are owned by a company controlled by the appellant.

Impacts upon the subject land -
Mr McAuliffe argues that much of the former pleasant ambience of Laurel Avenue is now being impacted by noise and fumes from commuter traffic. He advises that traffic has now increased to the extent that police radar traps are a regular occurrence in order to reduce speeding motorists. He notes also that due to traffic backing up along Longman Terrace of a morning, residents of Sutton Street have difficulty in entering the traffic flows.
Another source of noise comes from certain recreational activities associated with the adjoining Police College residential establishment. Mr McAuliffe argues that while the appellant has so far not lodged any formal complaint about noise levels, its consistency and repetitive nature are beyond normal levels experienced in residential areas. For that reason he argues some further allowance should be made in the valuation for that purpose.
Mr O’Connor concedes that activities upon the Police College site are beyond normal residential levels, but he argues that he has made allowance for such proximity. He further argues that visual impacts are partly relieved by trees and shrubs along the intervening boundary. It is agreed that the police car parking areas and accommodation buildings are towards the common boundary with the subject land.
Mr McAuliffe further notes that while the regular electric passenger trains provide little noise impacts upon Laurel Avenue, there is noise from occasional goods trains. However he agrees that the railway line is about 250 metres to the east of Laurel Avenue.
In respect of the visual impact of the adjoining Police College, Mr McAuliffe further argues that the added-on nature of the fibro extensions adds little to the general ambience of Laurel Avenue. He sees that building as a detriment to the visual appearance of the adjoining subject land.
It is agreed that Laurel Avenue was free of the major river floods in 1974, but Mr McAuliffe argues that the area in fact was isolated by those flood waters at that time.
Relativity -
While actual relativity was not specifically mentioned in the Notice of Appeal, the change in former relativities was identified. Mr McAuliffe notes that increases in unimproved values of adjoining parcels are generally considerably less than those attributed to the subject land. He argues that it is an important objective of the Valuation of Land Act to ensure fair and equitable liability for revenue implications. On that basis he questions why adjoining parcels in Sutton Street have experienced increases of from 10% to 11%, while the subject land had increased from $385,000 to $550,000 (43%) in the relevant period.
In drawing those comparisons Mr McAuliffe provides the unimproved values of the adjoining lands at 18 and 20 Sutton Street (total area 1,764 m²). He notes that those two parcels increased from $396,000 (1 October 1998) to $435,000 (1 October 1999 – 9.8%), and to $480,000 (1 October 2000 – 10.3%). Mr McAuliffe argues that an increase of about 11% would also be reasonable for the subject land, in line with other areas of Chelmer. Mr McAuliffe concedes that subsequent to the current valuation there has been considerable movement in the property market in the Chelmer and Indooroopilly areas. When those more recent sales are later analysed, he believes that larger increases are likely to be evident. However he argues that at the relevant date in the current matter there was insufficient reliable sales to justify the large increase given to the larger lots in Laurel Avenue such as the subject land.
Because of the paucity of sales of larger parcels in Chelmer, Mr McAuliffe sought support for his conclusion from an older sale of Defence land across the Brisbane River at Indooroopilly, which is discussed later. While he agrees that it is a different market sector, Mr McAuliffe argues that any comparisons of sales of reasonably comparable lands should be used to assess relativity, where comparable sales are not more closely available. Mr McAuliffe notes that the Defence land at Indooroopilly had in fact reduced in unimproved value from $1,400,000 (1998) to $1,050,000 (1999 and 2000).
While neither party has relied upon a sale at 8 Laurel Avenue, opposite to the subject land, details provided of that sale revealed that parcel of 733 m² has an unimproved value of $280,000 at the relevant date. It is also noted that there has been no appeal against that unimproved value. Mr McAuliffe rejects comparisons with that parcel, which he argues is not comparable with the much larger parcel of the subject land.
Mr O’Connor provides evidence that in assessing the many valuations in the Sherwood division at the relevant date, he saw the need to reassess the former relativities in line with market evidence. He agrees that the general level of increase across Chelmer, Graceville, Sherwood and Corinda had varied from about 10% on the high side of the railway line, to about 15% on the lower lands. However sales suggested that select areas were achieving higher sale prices averaging of the order of 30% to 50%. Accordingly he had completed about 4,000 manual adjustments, of which the subject land was one example.
Laurel Avenue and Honour Avenue were two areas where larger increases had occurred. However in subsequently revising the subject land after the court supervised preliminary conference, and drawing relativity with other larger parcels in Laurel Avenue, Mr O’Connor had reviewed his valuation down from $600,000 to $550,000.
Mr O’Connor also advises that had the subject land not been impacted by the Heritage building, the traffic, the Police College and the large ornamental trees which were likely to have to be retained, he feels that the land as a single vacant site would have had an unimproved value of $700,000. In his opinion, had the land been a vacant site, then the separate lots would have had unimproved values of about $300,000 (Lot 1), $450,000 (Lot 2) and $400,000 (Lot 3), or a total value of the parcel at $1,150,000.
On that basis he argues that he has made allowance of about $600,000 for the existing use and heritage nature of the buildings and thus ignored any higher development potential for the lands.
In explaining why he has placed such a higher value upon the Laurel Avenue properties, Mr O’Connor advises that the current refurbishment and redevelopment of sites in that locality demonstrates the high demand for location with a Laurel Avenue address. He notes that small properties of only 400 m² are commanding high prices in the current market. However he agrees that the recent development of less character style houses in such sites is tending to detract from the ambience of Laurel Avenue.
In respect of any impact of direct access to the river, or sites with river views, Mr O’Connor advises that there is an appreciable increment in price for the sites with direct access to the water. He argues that sales in Graceville indicate that direct access to water may result in an increase in value of a property by about 25% to 35% over those only with river views.
Comparison of sales -
It is agreed by both valuers that there is a paucity of sales of directly comparable larger parcels in that area. To support his conclusions Mr McAuliffe provides the following sales:

Sale 1 – (8 Laurel Avenue, Chelmer – Lot 145 on RP 29370). This parcel is located immediately opposite the subject land, and has an area of 733 m². At the date of sale the property was developed with a low set weather board dwelling, which has subsequently been removed, and replaced with a relocated dwelling from Indooroopilly. The relocation of the old dwelling from another site in Indooroopilly is currently the subject of local objections by residents, due mainly to differences with building clearances required under the Town Plan.

Mr McAuliffe argues that the circumstances of that sale were such that reliance upon it as a sale of vacant land cannot be supported, as the existing dwelling brought added value to the land. The sale sold in December 2000 for $390,000, and the land has been applied at an unimproved value of $280,000. Mr McAuliffe rejects that sale as providing any reliable comparison of land value for the subject land.

Sale 2 – (168 Laurel Avenue, Chelmer – Lots 166 and 167 on RP 29388). This corner parcel is located about 800 metres south of the subject land, and has an area of 809 m². At the time of sale the land was occupied by an existing dwelling (apportioned at sale at $80,000), which was leased for a period and has subsequently been demolished for a new family residence. Mr McAuliffe argues that the sale was not vacant land as the existing old dwelling provided added value to the land. The sale sold in October 1999 for $390,000, and has been applied at an unimproved value of $325,000.

Sale 3 – (65 Richmond Street, Graceville – Lot 102 on RP 29385). This sale of vacant land is located about 700 metres south of the subject land, and has an area of 409 m². The land sold in March 2000 for $192,000, and was subsequently resold as a developed site in March 2001 for $490,000. The land had been applied at an unimproved value of $157,500.

Mr McAuliffe rejects the sale of such a small parcel as any meaningful comparison to the subject land, and relating only to values of small lots in that locality.

Sale 4 – (42 Rosebery Terrace, Chelmer – Lots 2 and 3 on RP 99666). This riverfront parcel is located about 600 metres north-east of the subject land, and has an area of 2,749 m². The sale sold in September 2000 for $1,350,000, and the existing dwelling (a John Dalton design) was subsequently removed to make way for a new upmarket dwelling. The land has been applied at $1,050,000, and the sale is seen as much superior due to its river frontage, and not comparable to the subject land.

Sale 5 – (213 Clarence Road, Indooroopilly – Lot 195 on SP 113021). This riverfront parcel is located across the Brisbane River about 1 kilometre north of the subject land, and has an area of 11,900 m². The land is occupied by a large two-storey Heritage Listed residence, formerly the home of the Army General of Northern Command. The land adjoins other Army land regularly used by the Army Reserve.

The sale sold in July 1998 for $1,450,000, and was applied at the relevant date at $1,050,000. While he acknowledges that the sale is in a different market sector at Indooroopilly, Mr McAuliffe sees some use in comparing that sale due to the lack of other comparable parcels to the subject land.

In support of his valuation, Mr O’Connor refers to the three common sales as follows:

Sale 1 – (168 Laurel Avenue, Chelmer – Lots 166 and 167 on RP 29388). Because of the subsequent removal of the old dwelling in late 2000, to make way for a new residence, the sale was seen as a vacant land sale. After allowing for house removal costs incurred at the site, the sale was analysed at $390,000, and applied conservatively at $325,000 (83%). The sale is seen as inferior to the subject land.

Sale 2 – (65 Richmond Street, Chelmer – Lot 102 on RP 29385). The sale is seen as much inferior due to its much smaller size and inferior location. The sale was analysed at $190,500, and conservatively applied at $157,000 (82%).

Sale 3– (44 Rosebery Terrace, Chelmer – Lots 2 and 3 on RP 99666). The sale is seen as far superior to the subject land. While smaller, it has the advantage of river frontage and views of the water. The sale was analysed at $1,358,000 after removal of the old dwelling, and has been conservatively applied at $1,000,050 (77%). Mr O’Connor notes that demolishing costs of the building were more like $30,000, rather than the $10,000 he has allowed for.

Mr McAuliffe’s basic argument is that because there are no directly comparable sales of vacant lands in Chelmer, then it is prudent to seek other evidence from a wider locality. For that reason he gets comfort from an analysis of his Sale 5 (213 Clarence Road). He notes that while that property fronts the Brisbane River, there is only about 8,000 m² to 9,000 m² of useable land for development. The balance of the land falls steeply to the river.
While he accepts that residential lands are not normally bought on a per square metre basis, Mr McAuliffe argues that an analysed rate of useable land on Sale 5 reveals rates of between $116.70 per square metre (9,000 m²) $131.20 per square metre (8,000 m²). If he then applies those rates to the subject land he concludes a value between $352,663 and $396,768, supporting his conclusion that an increase of about 11% in the valuation should be appropriate.
Mr McAuliffe notes that the unimproved value of Sale 5 (213 Clarence Road) remained unchanged from 1 October 1999 to 1 October 2000. He notes further that direct relatively between Sale 5 (213 Clarence Road) and the subject land at 1 October 1999 reveals the subject land was determined at $385,000 ($127.35 per square metre). He then concludes that as the riverfront land at Sale 5 (213 Clarence Road) would have a higher value than the subject land, he believes that the unimproved value of the subject land at 1 October 2000 should remain at about $385,000. Then adopting the analysed rate of $131.25 per square metre he concludes a value of $400,000 for the subject land.
Mr McAuliffe sees another reason for seeking comparisons with Sale 5 (213 Clarence Road) was because of the similar noise impacts evident upon that parcel. The adjoining Defence Reserve activities, and the nearby railway line, bear some comparability, in his opinion, with the impacts evident from the Police College and the railway line at the subject line.
Mr O’Connor rejects comparisons with Sale 5 (213 Clarence Road) as he notes that is an entirely different market area, and the sale is vastly different in size. While he has not personally analysed that sale, he notes that its current applied value of $1,000,050 is very conservative compared to his Sale 3 (44 Rosebery Terrace). He also notes that was an old sale (July 1998), and was developed with a large existing Heritage Listed building. Mr O’Connor argues the sale has no real relevance in the Chelmer area.
In respect of Mr McAuliffe’s Sale 1 (8 Laurel Avenue) Mr O’Connor draws no support from that sale, although it is the nearest to the subject land. He notes that there may have been some uncertainty in respect of any added value of the existing dwelling that was later removed. He was aware that the old character style dwelling had been located to another site in Graceville owned by that owner (McLean-Lynn). However in hindsight in view of the other sales in the area, he now believes that Sale 1 (8 Laurel Avenue) could be accepted as a sale of land with expectations of its use as a vacant land, although it is slightly a high sale in the market place.
In respect of the common sale at 168 Laurel Avenue, Mr McAuliffe advises that old dwelling was only removed after extensive dialogue between the purchaser and the Brisbane City Council, who initially resisted the clearance of the site. Mr O’Connor concludes that at the time of sale it was likely to have been the purchaser’s intentions to clear the site for a new dwelling. Mr McAuliffe disagrees, arguing that he was informed otherwise, and perhaps a refurbishment of the old dwelling was contemplated. However, on reflection, the conservative nature of Mr O’Connor’s application of that sale at only 83% of the analysed market price, suggests that any uncertainty of the purchaser’s original intention may have been allowed for in the comparison.
In concluding his comparisons, Mr O’Connor sees his Sale 1 (168 Laurel Avenue) as his main sale, with his Sales 2 and 3 as supporting sales, to demonstrate the trend in increasing values in the Chelmer area. He argues that there has been a significant number of sales that he has analysed in the Chelmer to Graceville area, conceding however that most of those occurred east of the railway line, with much fewer numbers of sales along the Laurel Avenue and Honour Avenue areas.

He notes further that there is now a trend in Chelmer for buyers to seek the larger home sites where a new substantial dwelling may be built. He concludes that such larger sites tend to attract a premium for the larger size. While he provides no evidence to support that conclusion, he argues that in some prestige areas there is now appearing a trend in values almost on a per square metre basis. However Mr O’Connor rejects such a comparison relying instead on the recognised site basis comparison.
Decision:

The nature of the land -

It is agreed by both valuers that the existing old building was unlikely to be able to be removed from the subject land. While there is no direct Heritage restriction in place, I believe that the historical nature of the building and its design, together with its obvious Character Housing classification, would preclude such occurrence.
While Mr O’Connor has valued the land under s.17 as a single dwelling site, that legislation merely precludes any consideration of the land for purposes other than as a single dwelling site. The further impact of Heritage significance removes even any potential for that single residence site to be redeveloped for a new single residence. While the old John Dalton dwelling on 42 Rosebery Terrace, and the character dwelling on 8 Laurel Avenue, were both subsequently removed or demolished, the historical nature of the subject building may prove a more insurmountable barrier to redevelopment. In the end however Mr O’Connor has made allowance for the Heritage nature of the building, together with its use under s.17 as a single dwelling site, to an extent of about $600,000.
The evidence further suggests that without the heritage implications or other additional impacts from the Police College, as a single dwelling site the land would be valued at about $700,000. Clearly, in my opinion, there has been adequate allowance made for the potential heritage implications.
In respect of any noise or inconvenience from the commuter traffic congestion, I accept Mr O’Connor may have initially slightly underestimated that impact. However in applying a further reduction of $50,000 from the earlier $600,000 unimproved value, I believe those increase impacts have been allowed for. I note that the further reduction to $550,000 reflected a review of other relativities of larger parcels in Laurel Avenue, which also suffer from the increased traffic congestion.

Relativity -

In respect of changes in relativity between the larger subject land and the smaller parcels at 18 and 20 Sutton Street, I agree with Mr McAuliffe that might raise concern for the appellant. However, while the maintenance of correct relativity is important (WM and TJ Fischer v Valuer-General) 1983 9 QLCR 44), that is not to say that relativity between parcels might not change from time to time.
Indeed that was noted in R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, where the Land Appeal Court said at page 17:
“It has been well recognised over the years that previously established relativity in unimproved values can and does change from valuation to valuation. If there was no justification for a change in relativity, the valuer’s task would be very simple in that all that would be required to establish value would be accomplished by the use of an adjusting formula. This, of course, is undesirable.”

In Barnwell, the Land Appeal Court followed guidance established in Ladies’ Hosiery and Underwear Ltd v West Middlesex Assessment Committee (1932) All ER 427, where the Court of Appeal considered the importance of fair and equal relativity between parcels. Scrutton LJ agreed with that principle, but conditioned it at page 432 as follows:
“I agree, but, in my view, there is a third important qualification, that the assessing authority should not sacrifice correctness to ensure uniformity, but, if possible, obtain uniformity by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error.”

That principle was followed by the Land Appeal Court in Barnwell where it said at page 16:
“We are conscious that it is desirable that valuations made for the purposes of the Valuation of Land Act of comparable lands should bear proper relativity, one to the other, if 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.”

Subsequently that was further reported in BG and AK Wilson v Chief Executive, Department of Lands, (1994-95) 15 QLCR 63, at 72; H and E Grahn v Valuer-General (1992-93) 14 QLCR 327; and also in LR and MM Bignell v Chief Executive, Department of Lands (AV92-65), 4 March 1996 unreported.
The directions of Fischer (supra) further emphasise the importance of comparing relativity with sales evidence, where the Land Appeal Court said at page 46:
“It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence.”

It is also noted that a large percentage increase in a valuation does not of itself constitute a reason for error. That was noted in NR and PG Tow v Valuer-General (1978) 5 QLCR 378, where the Land Appeal Court said at page 381:
“It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation.”

If I turn then to Mr McAuliffe’s relative comparisons with his Sale 5 (213 Clarence Road), I note that he relies in part upon the stability of the unimproved value of that parcel between 1 October 1998 and 1 October 2000. On that basis he argues that it is inconsistent to increase the unimproved value of the subject land by 43%, while surrounding parcels only increased by 11%, and the reasonably comparable larger parcel at Indooroopilly (Sale 5) did not increase at all.
However in summarising the adjoining parcels near the subject land, I find I have the following comparisons:

Parcel	Area	Unimproved Value
18 – 20 Sutton Street	1,764 m²	$480,000
8 Laurel Avenue	733 m²	$280,000
Subject land	3,023 m²	$550,000

Comparison of sales -

Both valuers agree that directly comparable sales evidence was not available, and both have used their considerable experiences to seek guidance as to the market for the larger parcels along Laurel Avenue. The difficulties confronting both parties in such matters was clearly noted in BG and AK Wilson v The Chief Executive, Department of Lands (supra), where the Land Appeal Court said at page 70:

“It has been said on many occasions that valuation is not an exact science. It rests upon the opinion of those in the market place who will prefer one aspect to another, one suburb to another and so forth. It is the duty of the valuer to interpret and apply that market on principles which require comparisons to be made of ‘like with like’ wherever possible.”

In the absence of sales evidence of directly comparable parcels both valuers have followed the principles supported by the Land Appeal Court in the majority decision in King Ranch Pastoral Co. Pty. Ltd. v The Valuer-General (1966) 35 CLLR 255, where the Land Appeal Court found at page 259:
“In not attempting to do this, Mr. Walker adopted a method of valuing based on knowledge and experience rather than one lacking precedent and authority.”

That was further clarified in the wording of the minority decision of that case where the Learned Member noted at page 262:
“In Bingham v Cumberland County Council (1954) 20 L.G.R. 1 at pp. 18 and 19 Sugarman J. says ‘In the absence of sufficient guidance to be had from sales, the valuer may find himself in the position resembling that to which Lord Romer referred in the Raja case (1939) AC at pp. 312 and 313, in which he will have no market value to guide him, and he will have to ascertain as best he may from the material before him what a willing vendor might reasonably expect to obtain from a willing purchaser for the land.’ The valuer at arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant.”

If I turn then to the sale at 168 Laurel Avenue, the major difference between the valuers relates to whether there was any added value attached to the old dwelling which was subsequently demolished. Mr McAuliffe has concluded that the apportioned value of $80,000 shown on the notice of transfer lodged with the respondent, reflects what that purchaser saw in the transaction. His evidence is that it was only after extensive research and persistence that the new owners gained Brisbane City Council approval to demolish the building some one year later. Meanwhile the dwelling had been leased while the application to demolish was processed by the Council.

Mr O’Connor by comparison argues that had the old dwelling not been demolished then he would not have used that sale because of the added value implications. However Mr O’Connor’s advice is that such demolitions and replacement are now common in many parts of Chelmer to Corinda, and he believes that sale reflected merely the value that the new owners saw in the land. However he has only applied a conservative value of $325,000 for the land, which is not inconsistent with a value of $310,000 (allowing for the apportionment), plus demolition costs. On balance I accept Mr O’Connor’s analysis of that sale. I believe that the leasing of the old building while the application to develop the land was processed, would have been a prudent holding arrangement for the new owners, bearing in mind the relative low return on the $390,000 investment.
In respect of the two sales of 65 Richmond Street and 44 Rosebery Terrace, I agree that those two sales demonstrate two different property market sectors. As such they represent respectively vastly inferior and superior properties, but they also demonstrate the healthy state what could be referred to as an active property market in the Chelmer area. Mr McAuliffe agrees with that trend, but merely questions the availability of adequate evidence to demonstrate the increases in value now appearing. However I believe that Mr O’Connor’s conservative applications of his three sales demonstrates some caution in applying the changing market prematurely.
If I then consider Mr McAuliffe’s Sale 5 (213 Clarence Road), I note that property is in a different suburb (Indooroopilly), removed from Chelmer by the Brisbane River. The sale has similarities with the subject land in that it adjoins other Government facilities, and is occupied by an historic building. However there are major differences in size and location. The Indooroopilly sale has an area of 11,900 m², or nearly four times the size of the subject land. It may only have about 9,000 m² of directly developable land, but that is not to say the remaining 2,900 m² of steeper land to the river does not have value to the owner.
In fact that steeper land guarantees direct and unobstructed views of the river. In addition that land has direct access to the water. I accept Mr O’Connor’s conclusion that direct access to water adds about 25% to 35% in value beyond lands only with river views; and that even with substantial glimpses of river views would also add to the value of those land. I then conclude that the Indooroopilly sale should have a considerably higher value relative to the smaller subject land, which is without any river views or access to the water.
On balance I agree with Mr O’Connor that direct comparisons with Sale 5 have considerable problems. The comparisons on a per square metre basis also provide little assistance. Indeed the preferred method of comparing sales of residential properties was clarified in Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327, where the Land Appeal Court said at page 330:
“The appellants fail in 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 of (H & E Grahn 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 comparisons should take into comparison such matters as the size of the lot, 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.’”

In summarising the sales evidence I accept that 168 Laurel Avenue is the nearer sale to comparability, providing guidance that the subject land is superior to its analysed rate of $390,000.
Summary:
In summarising this matter I find that the applied value of $550,000 is consistent with Mr O’Connor’s sales comparisons; and also with the applied values of the adjoining properties, particularly 18 and 20 Sutton Street at $480,000. I am also reminded that in respect of her appeal, section 45(4) of the Act directs that the onus to prove her grounds of appeal rests with the appellant.
However that onus rests upon the appellant only in respect of proving that the Chief Executive has followed a wrong principle or made a serious error of fact. (Brisbane City Council v The Valuer-General (1977-78) 140 CLR 41 at page 56 per Gibbs J). In the current matter I find that has not been demonstrated. Under s.33 of the Act I am therefore directed that the unimproved value of the subject land shall remain unless proved to the contrary.

Conclusion:

Having considered the whole of the evidence I am not persuaded that the appellant has proved her case. The appeal is dismissed, and the unimproved value of Lots 1 to 3 on RP 900681 as determined by the Chief Executive in the sum of $550,000 is affirmed.

NG DIVETT
MEMBER OF THE LAND COURT