Killin v Chief Executive, Department of Lands

[1996] QLC 100

[1996] QLC 100

 

LAND COURT BRISBANE

2 AUGUST 1996

In the matter of an appeal against a a valuation Valuation of Land Act 1944

Valuation Roll No.:    37674      Local Government:  GCCC-Albert (AV95-292)

William R and Nester Killin v.

Chief Executive, Department of Lands

(Hearing at Coolangatta) D E C I S I O N

This is an appeal against the valuation placed on the appellants’ land by the Chief Executive in the amount of $255,000 as at a relevant date of 1 January 1995. The proceedings are initiated under the Valuation of Land Act 1944. In their appeal, the appellants contend for a valuation of $195,000 arguing that there is no warrant for the Chief Executive to increase the valuation on the subject land from the previous valuation.

Mr. William Raymond Killin, appeared for and gave evidence on behalf of the appellants whilst the Chief Executive gave evidence through Mr David Robert McKinnon, a registered valuer employed by the Department of Natural Resources, which includes the former Department of Lands.

The grounds of appeal are as follows:

u“Valuation not supported by sales of land in the area.

uValuation not relative to valuation of lands in immediate area.

uEnjoyment of land disadvantaged by various factors which have not been considered.

uValuation of land excessive having regard to the provisions of See 3(1) Valuation of Land Act 1941(sic).

u   Land and Improvements market value do not reflect valuation of land appealed against.” The subject land is situated in the locality of Cypress Gardens about 3 km west of the Broadbeach Post Office and beaches, in the city of the Gold Coast. The land is described as Lot 172 on RP 125838, Parish of Gilston, County of Ward; has an area of 979 m² and is zoned Residential “A” in the Town Planning Scheme of Gold Coast City and is used for single unit residential purposes. Access to the property is via Conifer Crescent, a full width, bitumen sealed road  with  concrete  kerbing  and  channelling  and  underground  power  supply,  town  water,

sewerage and telephone are available to the property.

The subject land has an irregular shape with frontage to the Nerang River of 29.82 metres and a road frontage of 15.57 metres.   The block has been filled and has a revetment wall

constructed along its river frontage, further protection from wave action in the river being provided by rock filling placed there by the local authority during 1995.

Before considering certain substantial issues raised by the appellants, I will deal with some peripheral matters. Mr. Killin mentioned in a statement tendered to the Court that no improvements had been carried out on the subject land since the date of the previous valuation. This is a matter which is not relevant to the task before me as s.3 (1)b of the Act provides that I am to consider the valuation of the subject land as if any improvements on it did not exist. A further matter raised by Mr. Killin flows from a market appraisal recently provided to him by local real estate agents in the amount of $375,000 for the subject land, including improvements. Mr. Killin submits that if the value of the subject land were $255,000 as the Chief Executive asserts, then the improvements which include a 30 square brick home and a fully tiled pool amongst others, would be valued at $120,000 only.  As it is Mr. Killin’s view that such a figure is an unrealistic value to place on the improvements on the land, it follows, he submits, that the valuation of the Chief Executive must be wrong. This is an argument which I cannot accept. Firstly, it may be the case that the appraisal by the real estate agents was wrong, however I can have no concluded view on this, as he was not presented for cross-examination. Secondly, it needs to be appreciated that it is not unusual for improvements to have a surprisingly diminished value in the minds of some when land values are comparatively high in a particular area and where such land enjoys features such as water frontage. I have even heard evidence during recent sittings at Coolangatta, of buyers purchasing residential properties solely for the purpose of demolishing perfectly useful improvements in order that a modern house may be constructed on the land.

Mr. Killin mentioned a property adjacent to the subject land, namely Lot 173 which I will return to later, but at this stage of the decision I would simply mention his reference to the failure of Lot 173 to sell at auction, being passed in at $450,000. This event further indicated to Mr. Killin that the land value of the subject which he sees as being less than that of Lot 173 must be too high presumably on the basis that the improvements on Lot 173 are also substantial and would in his view be proportionately as valuable as those on the subject land. Apart from what I have said about the matter of improvements above, this evidence is of no use in striking a value on the subject land for a failure to sell can be evidence pointing to a number of factors, none of them relevant to establishing a value for the land sought to be sold. The leading authorities on the law and principles of valuation, express the need to construct an hypothetical transaction which actually concludes rather than drawing upon the absence of a transaction. See for example Spencer v. The Commonwealth (1907)5 CLR 418.

Mr. Killin listed eleven primary sales in the statement he tendered to the Court, nine of which are located in Cypress Drive, Broadbeach Waters, having a northerly aspect to a lake, ranging in price from $130,000 to $160,000 with dates of possession between June 1994 and January 1995. In addition, he included a transaction which took place in Huon Street, Broadbeach Waters for $169,000 settling in December, 1994, this property presumably also facing the lake.  Mr. Killin argued that whilst these sales did not have frontage to the river, there

was some similarity in the aspect over the lake and that the level of these sales indicated that it would be an error to strike a valuation on the subject land, approximately $100,000 higher than the range offered in the basic sales. No block by block comparison was provided comparing any of these transactions with the subject land.

Within the same group of primary sales, Mr. Killin also included a transaction settling in October, 1994 at Villa Court, Broadbeach Waters in an amount of $220,000 and in reference to this he said that this sale did not afford a suitable comparison with the subject land as it is not in the vicinity of the subject and is a one off sale. Mr. McKinnon for the Chief Executive, noted that the Villa Court block was fan shaped as is the subject and sold for more than the other blocks listed by Mr. Killin, which were presumably rectangular blocks, but did not otherwise comment on the suitability of this transaction as a basis for valuation. It follows that I would not rely on this transaction.

In addition to the primary sales mentioned above, Mr. Killin referred to additional sales, the first being Lot 174 in Conifer Crescent, which had sold in 1984 for $154,500 then resold in 1996 for $340,000 after further improvements had been affected on the land. Also included in this supplementary list of sales is a sale and resale of Lot 149 in Conifer Crescent, in July 1995 for $310,000 and January, 1996 for $313,000. Finally, references made to a sale of Lot 155, Conifer Crescent in February, 1996 for $295,000. Each of the dates I mentioned above are not the dates of transaction, but the dates of possession. Mr. Killin also included the prevailing unimproved value on these supplementary sale blocks applied by either the Chief Executive or the previous office of the Valuer-General. No direct comparison was offered between any of these supplementary sales and the subject land and in any event, I find these transactions to be of no assistance to me. As I understand the evidence, they were all improved sales and in the absence of an analysis back to unimproved value, they cannot be used for the purposes of establishing a value under the Valuation of Land Act. Reference to Clough v. The Valuer- General (1981-82)8 QLCR 70 may be useful here:

“It has been judicially laid down many times and in many jurisdictions that in

ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value.” (at 76)

Mr. Killin made reference to Lot 173 Conifer Crescent which adjoins the subject land to the south and had at the relevant date a valuation determined by the Chief Executive at $250,000. In evidence, Mr. Killin said that whilst he did not agree with the valuations placed on nearby properties by the Chief Executive, it was his view that Lot 173 was marginally more valuable as an unimproved lot than was the land of the appellants. Lot 173 is marginally larger than the subject land having an area of 995 m2 compared with the subject’s

979 m2 and has a slightly larger street frontage, a feature which is seen as significant in Mr. Killin’s thinking. Lot 173 has a 2.5 m shorter river frontage than does the subject on a survey basis, but given the shape of both lot 173 and the subject, the corner to corner dimensions in a

straight line favour the subject to the extent of about 5 metres according to Mr. McKinnon. Mr. McKinnon has not been on Lot 173 however, from his inspection in the adjacent area together with his interpretation of available maps and plans, he formed the view that the aspect of Lot 173 over the water was inferior to that of the subject. Mr. Killin who knows both parcels of land well, said that Lot 173's views over the water were better than the subject’s and whilst this is difficult to appreciate from the plans provided in evidence, I do note that Lot 173 also enjoys an aspect over a canal which would probably be unavailable to the subject. I would on the basis of the available testimony on this point have to prefer the evidence of Mr. Killin.

The appellants referred also to Lot 169 Conifer Crescent which sold in June 1994 for

$255,000 and which Mr. McKinnon said had been valued at $230,000 by the Chief Executive at 1 January, 1995. Whilst Mr. Killin saw some difficulty in comparing this land with the subject, I drew him to say that the subject was probably inferior to Lot 169. This is an opinion

with which Mr. McKinnon did not agree and in fact Lot 169 was included as Sale No. 1 in the three sales relied upon by Mr. McKinnon in his valuation. The two other sales were located in Witt  Avenue,  Cararra  and  Fitzwilliam  Street,  Cararra  and  were  applied  at  $197,500  and

$225,000 respectively, following deduction of improvements. Mr. Killin did not know the sale blocks, however, pointed out that whilst the sale blocks overlook a part of the river which is a designated water skiing area which generates noise, the subject land whilst not fronting a designated water skiing area, is also subject to similar nuisance. There would be no benefit in my detailing these two basic sales further as there was no challenge concerning the appropriateness of relationship between the three sales tendered by Mr. McKinnon and it seems to me that on the basis of the evidence provided, the application of the sales appears to align with each other.

I will return to the sale of Lot 169 Conifer Crescent which Mr. McKinnon applied at

$230,000 following the deduction of improvements. In his view, the sale property is inferior to the subject due to the smaller area ie. 771 m2 compared to the subject’s 979 m2; smaller water frontage ie. 18.9 metres compared with the subject’s 29.82 metres and being the subject to a drainage easement of 2 metres in width running along the northern boundary. Whilst Mr. McKinnon sees the easement as an impediment, he pointed out that local authority building set back from the site boundary is 1.5 metres, therefore the practical impact of the easement on the utility of the sale block is not a matter of any moment.  For his part, Mr. Killin said that Lot 169 is more even in shape and has a wider frontage than does the subject in the amount of 3.33 metres overall, 2 metres of which is impacted by the drainage easement. Mr. Killin explained that the lesser frontage on the subject block impacts upon the design of building possible on the subject land and also on the ease of construction.

Mr. Killin’s concentration on length of road frontage is in my view, misdirected when one has regard to the market based evidence referred to by Mr. McKinnon, an experienced valuer who said that river frontage was a matter of greater significance in the marketplace. I accept Mr. Killin’s evidence that there are certain disabilities with river frontage both in terms of the erosive effects of wave action on riverfront lands and the noise and inconvenience to neighbours created

by river traffic, however such nuisances would impact as much on Lot 169 as they would on the subject and in any event, it was Mr. Killin’s view that Lot 173 was superior to the subject given its more expansive river outlook.

In summary, it is my view that the sales referred to by Mr. Killin in Cypress Drive and Huon Street, Broadbeach Waters are less than suitable indicators of value in contrast with the basic properties tendered by Mr. McKinnon. Lot 169 is clearly the best basis and is supported by two other sales also enjoying an outlook over the river but no doubt being subjected to the negative aspects of such a position, such as they are. Nevertheless, I need to take into account my conclusion that Mr. Killin’s appreciation of Lot 173 is superior to that of Mr. McKinnon’s and in view of this I have decided that the application of Mr. McKinnon’s basic evidence needs to be modified somewhat. Accordingly, I have decided to allow the appeal. I determine the valuation of the subject land at $250,000.

RP SCOTT MEMBER OF THE LAND COURT