Jenkins v Chief Executive, Department of Natural Resources
[2001] QLC 10
•9 March 2001
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BRISBANE
9 March 2001
Re: Appeal against Annual Valuation -
Valuation of Land Act 1944 -
Valuation Roll No: 6241
Local Government: BCC - Brisbane.
(AV99-383).
Faye Jenkins
v.
Chief Executive, Department of Natural Resources
D E C I S I O N
Background:
This matter relates to land at 25 Campbell Street, Bowen Hills, and described as Lots 43 to 45 on RP9895, Parish of North Brisbane. The subject land is located at the corner of Campbell and Hazlemount Streets, about 2.5km north of the Brisbane GPO. Access is good to both streets which are bitumen sealed with concrete kerbing and guttering. All urban services are available. The subject land has an area of 911 square metres, and each of Lots 43 to 45 have areas of 304 square metres, and are zoned as "Warehouse and Transport" under the Town Plan of the City of Brisbane of 1987 effective at the date of valuation of 1 October 1998. The key issues are relativity and comparison of sales.
On 8 March 1999, the Chief Executive issued a valuation of the subject land at $480,000. Following an objection the Chief Executive revised that figure to $385,000 on 22 June 1999. The appellant has now appealed claiming the unimproved value should more properly be $330,000.
Faye Jenkins appeared and gave evidence on her own behalf. Mr K Fisher, counsel of Crown Law, appeared for the respondent, calling evidence from Alan Ross Kirby, the Departmental registered valuer responsible for determining the valuation.
The Evidence:
(1) The Use of the Site -
The subject land at the date of valuation was improved with a single storey commercial building which was then occupied by a printing organization. Subsequent to the valuation the building has been refurbished and is now leased to a health care company which relocated there as part of its consolidation of resources which had previously been separated into three locations. The health care company saw advantage in location in proximity to the Brisbane Hospital Complex.(2) Relativity -
Ms Jenkins argues that an inconsistent relativity has been applied to the subject land compared to surrounding parcels. To support her appeal Ms Jenkins draws comparisons with the applied unimproved values of the following parcels, which she argues have comparable area, location, zoning and exposure to passing traffic.· Parcel 1 - (12 Hazlemount Street - Lot 46 on RP9895)
This is seen as a comparable lot to part of the subject land at 7 Hazelmount Street (Lot 43 on RP9895). Parcel 1 is used in conjunction with a car yard adjoining to the west and fronting Main Road. Parcel 1 has an area of 304 square metres and an applied rate of $345 per square metre ($105,000).
· Parcel 2 - (cnr Campbell Street & Mayne Street - Lot 1 on RP89174)
This has an area of 1,136 square metres and is used as a car yard and has a rate of $370 per square metre ($420,000), and is compared to Lots 44 and 45 of the subject land.
· Parcel 3 - (47 Montpelier Street - Lot 8 on RP10115)
This is a 948 square metre parcel, surrounded by high quality office buildings, and applied at $359 per square metre ($340,000).
· Parcel 4 - (10 Thompson Street)
This is an 804 square metre parcel, surrounded by office/warehouse buildings and valued at $351 per square metre ($380,000).
· Parcel 5 - (135 Abbotsford Road)
This is an 809 square metre parcel surrounded by industrial and service units, and applied at $236 per square metre ($190,000).
Miss Jenkins advises that in estimating the unimproved value of the subject land she has applied an average rate per square metre determined from Parcels 4, 5 and 6, concluding an average rate for the subject land at $315 per square metre ($285,143). She argues that demonstrates that the applied rate of $422 per square metre for the subject land is in error. Miss Jenkins notes that Thompson Street is the least similar property to the subject land due to the secondary nature of Thompson Street compared to Campbell Street or Montpelier Road. However she notes that parking is better at Montpelier Road, while there is no parking available in Campbell Street.
Mr Kirby rejects comparisons of relativity with Parcel 5 (135 Abbotsford Road) as he notes that property is impacted by proposals for development of the City/Valley Bypass Road, which was public knowledge prior to the date of valuation at 1 October 1998. As the valuer responsible for this area in both the 1998 and 1999 valuations, because of public uncertainty associated with the final location of the bypass road, Mr Kirby sees those values as blighted, and he has maintained the old values since 1997. Mr Kirby also notes that subsequent events have confirmed the partial resumption of Parcel 5 for the bypass works. Mr Kirby also draws the Court's attention to a previous matter in that area in Mayne Spring Works Pty Ltd v. Chief Executive, Department of Natural Resources (AV98-181 and AV99-680) 12 November 1999, unreported.
In that matter it was found at page 9:
"However the greatest impact upon the relativity in that area has been the potential impact of the proposed bypass road, and how that may have influenced the minds of potential purchasers of land in that locality. The decision by Mr Kirby to adopt a policy of no change to properties which are designated as potential compensation matters in the impact assessment study, recognises the level of uncertainty likely to be attributed to those parcels."
In comparing relativity between Lot 43 and Lot 46 in the current matter, Mr Kirby argues that Lot 46 is less exposed to passing traffic along Campbell Street. He has therefore reduced the unimproved value of Lot 46 to allow for the better exposure of Lot 43. He argues the respective unimproved values of $110,000 (Lot 43) and $105,000 (Lot 46) reflect the appropriate relativity of those two parcels. Ms Jenkins disagrees that Lot 43 has exposure to traffic along Campbell Street, due to the speed of the traffic and the vertical alignment of Campbell Street at that location.
Mr Kirby also draws relativity with adjoining parcels as follows:
| Parcel | Area | Applied Rate |
| 17 Campbell Street | 393m² | $458 per m² |
| 21 Campbell Street | 442m² | $448 per m² |
| 12 Hazelmount Street | 304m² | $345 per m² |
| Subject (Lot 43) | 304m² | $360 per m² |
| Subject (Lot 45) | 304m² | $535 per m² |
| Subject (Lot 44) | 304m² | $445 per m² |
| Total Subject (Lots 43 to 45) | 911m² | $422 per m² |
In concluding his valuation of the subject land Mr Kirby has adopted the following:
Lot 43 - 304m² @ $360 per m² = $110,000
Lot 44 - 304m² @ $445 per m² = $135,000
Lot 45 - 304m² @ $535 per m² = $162,000
TOTAL = $407,000
Less Bulk Discount (5%) = $ 20,000
UNIMPROVED VALUE = $387,000
Applied at $385,000
Comparison of Sales -
Ms Jenkins offers no sales, relying upon relativity. To support his valuation Mr Kirby supplies the following sales of vacant lands:
· Sale 1 - (29 Allison Street - Lot 231 on RP9371 and Lot 1 on RP9409)
This is a 622 square metre parcel zoned as "Service Trade", located about 1km north of the subject land, and backing onto Breakfast Creek. The sale is inferior overall, was sold in July 1997 for $250,000, and was analysed at $249,000, and has been applied at $210,000 ($338 per m²). Mr Kirby argues that reflected the value in the area prior to the decision in respect of the City/Valley bypass.
· Sale 2 - (33 Montpelier Road - Lot 17 on SP103712)
This is a 504 square metre parcel zoned as "Warehouse and Transport", located 300 metres south-east of the subject land, and seen overall as inferior. The sale has subsequently been developed as offices. The sale sold in October 1997 for $200,000, was analysed at $189,000, and applied at $175,000 ($347 per m²).
· Sale 3 - (29 Mayne Road and 12 Hazlemount Street - Lot 1 on RP78299 and Lot 46 on RP9895)
This is 919 square metre parcel zoned "Warehouse and Transport" and located 20 metres north-west of the subject land. The sale is seen overall as slightly inferior, and sold in February 1998 for $360,000, was analysed at $370,000 after allowing for demolition of a building, and has been applied at $325,000 ($354 per m²).
Mr Kirby argues that the current tenant of the subject land was formerly located at his Sale 2 location. He concludes that the better exposure to passing traffic at the subject land was likely to have been part of the reason for relocation. Mr Kirby also notes that the subject land is at a higher elevation than Sale 2, and is therefore superior. In seeking comparisons, Mr Kirby has allowed for the three separate parcels of the subject land, and he argues that the highest and best use of those parcels would be for Warehouse and Transport purposes.
However Mr Kirby notes that the area surrounding the subject land is used mainly for commercial type purposes, and he has sought comparisons with sales of lands where the zoning would allow for similar uses. In concluding those comparisons I note that "Services and Trades" and "Warehouse and Transport" zonings have much in common as regards permitted development and minimal site areas. (Exhibit 6).
On the basis of those sales the most comparable property is Sale 3 which has a similar area and is slightly inferior at $354 per square metre. However Mr Kirby also valued the higher potential of each of those three separately-surveyed parcels, each capable of separate development. Mr Kirby notes that the minimum area for newly-surveyed lots is 600 square metres, although there may be some discretion allowed by Council. However where separate titles already exist the land is seen to have some further additional value.
Mr Kirby provides no sales of superior comparable parcels to Lots 44 and 45, apparently relying upon relativities with the adjoining parcels at 17 and 21 Campbell Street. He then applies a rate of $535 per square metre for the corner parcel (Lot 45), allowing for its increased prominence and exposure to traffic. Mr Kirby argues that the unit rate per square metre is only one factor to be considered when determining the unimproved value.
Ms Jenkins queries Mr Kirby's confidence that the subject land may have some benefit of any possible relaxation of land use requirements by the Brisbane City Council (the Council). It was her personal experience that Council was likely to demand very stringent requirements in respect of any rezoning approvals, particularly in respect of truncation at the intersection of Campbell and Hazelmount Streets. However Mr Kirby refers to a property in Edgar Street which has now been developed on lands less than 600 square metres in support of his assessment of the benefit of separate parcels on the subject land. Ms Jenkins does not pursue that matter further.
Decision:
I turn first to the basis of valuation and note that Mr Kirby has adopted the method of comparing sales of vacant or lightly-improved parcels, which has long been preferred by Courts at all levels as the best basis for determining unimproved value. That was found in PH Clough v. Valuer-General (1981-82) 8 QLCR 70, at 76; and also in WM and TJ Fischer v. Valuer-General (1983) 9 QLCR 44, 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. "
In the matter of Ms Jenkins' approach of seeking relativity with comparable parcels, I note that was approved by the Land Appeal Court in R and MM Barnwell v. Valuer-General (1990-91) 13 QLCR 13, where the Land Appeal Court said at p.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. "
However in her approach of averaging the rates per square metre to determine a rate for the subject land, I note that Mr Kirby rejects that approach, directing to me to findings of the High Court of Australia in Daandine Pastoral Company Pty Ltd v. Commissioner of Land Tax (1943) 7 The Valuer 299, where Williams J said at page 305:
"This method of averaging is to my mind unsound. The prices obtained at comparable sales should not be aggregated and averaged, especially when the prices obtained on sales of small areas are dealt with in this way in order to obtain the value per acre of a large area. The only safe course is to compare each sale with the subject land separately. For instance, if three sales are considered to be comparable of £3, £2/10/- and £2 per acre are averaged, the average value would be £2/10 per acre. But if the subject land was closer in value to the land sold at £2 per acre than to the other lands, the average value would cause the subject land to be seriously over-valued. "
That principle has been upheld by lesser courts on many occasions subsequently.
If I then consider Mr Kirby's sales, I find that as a single parcel of 911 square metres the subject land is seen as slightly superior to his Sale 3 at $354 per square metre. The level of superiority, allowing for the greater exposure afforded by its corner influence, is currently assessed in relation to relativities along Campbell Street. The measure of Mr Kirby's analysis is that he sees the total parcel, after allowing for a bulk allowance at 5%, as representing $422 per square metre.
That can be compared to the adjoining parcel at 21 Campbell Street (442 square metres) at $448 per square metre. The applied rates confirm that there is generally some reduction in the rate according to the slightly larger area of 21 Campbell Street compared to 17 Campbell Street (393m² @ $458/m²). That principle is consistent with Mr Kirby's analogy of explaining his reason for applying a 5% bulk discount for owning three parcels. On balance there is nothing to discredit Mr Kirby's adoption of a 5% bulk discount, although it is noted that a bulk discount up to 10% has been applied on other occasions in this Court. Had such a discount been applied then a rate of $403 per square metre might be applicable.
However such speculation is not for this Court to contemplate, where there is no evidence to support it. I am reminded that this Court is not an investigating tribunal, and guidance in that matter was clarified by the Land Appeal Court in JL and I Qualischefski and Others v. The Valuer-General (1979) 6 QLCR 167, at p.172:"Neither this Court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-General to substantiate his case. This is in contradistinction to jurisdiction conferred under the Land Act.
In appeals of the nature of the subject, the onus which the appellant must assume is not an easy one to discharge without the assistance of a registered valuer who can lead evidence as to sales analyses and/or comparison with valuations made by the Valuer-General in respect of comparable properties."
In the end I find that the appellant has not discredited Mr Kirby's methods or his analyses. Mr Kirby has relied upon his experience as a valuer to determine the appropriate rate to be applied. The use of those methods depends upon the skills of the valuer, and involves certain judgments and adjustments, however some guidance was provided in Brewaranna Pty Ltd v. Commissioner of Highways (SA) (1973-76) 32 LGRA 170, where Wells J said at page 180:
"--- there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. It is, in my view, all a matter of degree: some adjustment is always necessary; too much adjustment will render it unsafe to use a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method. Just where the line is to be drawn is, it seems to me, the very sort of question that is fit for the expert valuer to determine; the assessment of the risks of adjustment is peculiarly within his sphere of skill. "
In the end I am reminded that s.33 of the Act directs that the Chief Executive's valuation is deemed to be correct unless proved otherwise. Once he has been shown to have made an error or to have used a wrong principle, then that assumption can be set aside. (Brisbane City Council v. Valuer-General) (1977-78) 140 CLR 41, at 56). However the onus is upon the appellant to prove her case under s.45(4) of the Act. On the evidence before me I do not conclude that the appellant has demonstrated that the unimproved value is incorrect.
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 43 to 45 on RP9895 in the sum of $385,000 is affirmed.
(NG Divett)
Member of the Land Court
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