KM Mackay-Payne as Trustee for Estate of Francis David McCay (Deceased) v Chief Executive, Department of Natural Resources and Mines
[2001] QLC 136
•20 December 2001
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BRISBANE
20 December 2001
Re: Appeal against a valuation
Valuation of Land Act 1944
Property ID No: 369/90000
Local Government: Cook
(AV1999-1235)
KM Mackay-Payne as Trustee for Estate
of Francis David McCay (Deceased)
v.
Chief Executive, Department of Natural Resources and Mines
D E C I S I O N
This is an appeal against an annual valuation of land in Cooktown owned by the appellant. Pursuant to section 13 of the Valuation of Land Act 1944 (the Act), the land was valued by the respondent as at 1 October 1998 at $75,000, the valuation to come into effect on 30 June 1999. The land in question, which is described as Lot 64 on C17924, is a residential block of 1290 m² situated at Baird Road, Cooktown.
The notice of appeal lodged by the appellant contained four grounds of appeal:1. Flooding – created by run-off waters;
2. Danger – cars running off Baird Road;
3. No sewerage;
4. No tarred road into property and bogging occurs due to flooding from road.
The appellant estimated, in the notice of appeal, that the unimproved value of the land was $59,000.
Mrs KM Mackay-Payne, the appellant, gave evidence in support of her appeal.The valuation under appeal was made by Mr GF Cotter, on behalf of the respondent. Mr Cotter’s report was tendered at the hearing and he also gave evidence in support of his valuation. Mr Cotter is a registered valuer employed by the respondent. He has 20 years valuation experience, including 14 years in the Cook Shire.
Mrs Mackay-Payne and Mr Cotter agreed generally on a number of matters.
Firstly, both witnesses said that the real estate market in Cooktown was very strong at the date of valuation. Mr Cotter described the market as “very buoyant” since early 1996, when an announcement was made that a bitumen road would be put through to Cooktown by 2005. The volume of sales increased markedly, he said, as did the value of the sales. He also said that the appellant’s property is one of the prestige sites in Cooktown and because that type of site is in limited supply, their values have increased more substantially than the rest of the market.Mrs Mackay-Payne said that around the relevant date the market “went crazy for a while” after the announcement of the road. She thought there were some “ridiculous sales”, most of them to people who were not local residents, and these had obviously pushed up the values in Cooktown.
Secondly, both witnesses agreed that the land in the vicinity of the appellant’s property was subject to significant run-off of water during the wet season. However, they did not agree on the extent to which this run-off adversely affected the appellant’s property, as compared with other specific properties which were the subject of Mr Cotter’s sales evidence.
Thirdly, both witnesses also agreed that many of the blocks in the area of the appellant’s land have rocky outcrops or are strewn with boulders. Again, there was disagreement as to the effect of these boulders on the appellant’s land as compared with other lots.
Fourthly, all of the blocks discussed at the hearing are on the side of Grassy Hill which overlooks the Endeavour River valley. Most of them, therefore, slope from a moderate to steep degree, making building more or less difficult.The unchallenged evidence is that the appellant’s property abuts Baird Road and Flinders Street, Cooktown and is approximately 600 metres by road north-east of the Post Office. Access is provided from the bitumen section of Baird Road across the gravel intersection with Flinders Street to the southern boundary of the property. Alternative access is possible from the gravel section of Baird Road to the north-east part of the property. Baird Road provides bitumen sealed access to the property while Flinders Street is gravel. Power, telephone and water are connected to the property. The land is an elevated irregular shaped block with irregular topography. Originally the block was moderately to steeply sloping down to the west and south-west but now has two benches separated by a line of rock boulders. Panoramic views extend to the north and west to Grassy Hill and over the Endeavour River Valley. The land is zoned “Residential” under the relevant town plan and is used for a single dwelling house. There are no restrictions on the current use of the land for residential purposes which is the highest and best usage of the land. The valuation of $75,000 was made on the basis that the land is a residential site.
Mrs Mackay-Payne purchased the property approximately four years ago for something in excess of $120,000. At the time, there was a rundown cottage on the land which Mrs Mackay-Payne has subsequently repaired and renovated.
The property backs on to Baird Road which lies above it, up an embankment. To the east, an unnamed road runs down the hill into Baird Road, joining Baird Road almost directly opposite the back of the appellant’s property. The land is cut in half by huge boulders lying through the centre of the property in an east-west direction. The cottage is built on the land to the south of the rocks. The garage is built on the southern side of the house and it appears that part of it encroaches across the southern boundary of the appellant’s land on to neighbouring land, which appears to be part of the Baird Road reserve. There was some disagreement as to the extent of the encroachment, Mr Cotter saying that most of the garage was not built on the appellant’s land, whereas Mrs Mackay-Payne said that most of it was on her land.
Mrs Mackay-Payne considers that a valuation of $75,000 as at 1 October 1998 (which is an increase of $25,000 over the previous annual valuation) is excessive, particularly because the property has a number of flaws.
The major problem is that, during the wet season, water cascades down the embankment from Baird Road onto the appellant’s land, flows through the garage and out the other side creating a waterfall down the steps on the western side of the property. Mrs Mackay-Payne considers that the flow is accelerated by water coursing down Baird Road and other water coming down the unnamed road to the east, directly on to her property. The Cook Shire Council installed some guttering at the entrance to the appellant’s property a number of years ago. This has stopped some waters washing into the property, but the water flow onto the land remains a major problem.
The line of boulders running through the land also causes problems, the appellant submitted, because the boulders prevent the whole of the land being utilised for building purposes.
Mrs Mackay-Payne is also concerned by the fact that because Baird Road lies above her property, a car could easily run off the road and down the embankment on to the land.
Mr Cotter relied on five sales in support of his valuation of the appellant’s property. All those sales were of vacant residential land with minimal improvements.
Sale 1 is a residential property of 1404 m² lying immediately to the north-west of the appellant’s land. The property is a regular shaped lot rising moderately from the street frontage before becoming a steep boulder strewn slope at the rear. There are river views available from the rear of the land. Power, telephone and town water services are connected to the property. At the time of the sale, access to the property was by a rough track. The property was sold on 28 April 1997 (some eighteen months before the date of valuation) for $68,200, a price which Mr Cotter considered accurately reflected the market. At the time of the sale, the only improvement to the land was clearing, valued by Mr Cotter at $3,000. Thus the analysed unimproved value was $65,200. Mr Cotter applied a value of $58,000 to this land. In his opinion the appellant’s land is superior to the sale land, because of its higher elevation and superior access.
The appellant said that she thought that the sale property was superior to her property because the former is absolutely flat. She also thought that it was not subject to extensive run-off from storm water, in comparison with her land, perhaps due to the fact that the owners have subsequently built a large retaining wall on the top side of the land. Other evidence indicates that the appellant is mistaken as to the topography of this land, in that it is not flat, at least in its unimproved state. Both the Cook Shire Council contour map, which was tendered by the appellant, and the evidence of Mr Cotter indicate that Sale 1 is a moderate to steeply sloping block, particularly towards the rear, and in this respect at least it is comparable with the appellant’s land.
Sale 2, which is described as Lot 68 on C17924 is a residential property with an area of 1733 m². It is a long, narrow, moderate to steeply sloping elevated block with river views. There are boulder outcrops on the land. Power, telephone and town water services are available. Access from the property is along a driveway leading to Baird Road which is gravel along this section. The property is about 70 metres north of the appellant’s land. The property was sold on 16 February 1998 (some eight months before the date of valuation) for $60,000. The only improvement at the time of the sale was clearing, which was valued at $2,000 by Mr Cotter. The sale was analysed at $58,000. Mr Cotter considered that the sale price was low and applied a value of $70,000. He said, in his report, that the sale property is comparable with the appellant’s land in that both have boulders and river views. He considered that the access to the sale property is inferior to the access to the appellant’s property because of the long driveway necessary to access Baird Road, which is gravel along this section. In his view the larger area of the sale property is of no advantage due to the topography of the site which makes the western area largely unusable. Overall, he considered the appellant’s land to be superior to this sale.
The appellant said that this block and Sale 5 were most comparable with her property in terms of the flood water running across the properties. She also thought that one of these properties might have a large stormwater drain pipe near it, constructed to eliminate water flow from Grassy Hill, which might in fact increase the flooding on to one of these properties. However, as there was no clear evidence before the Court as to the existence, whereabouts or function of this pipe, I have not taken it into account in this decision.
Sale 3 is a residential block, described as Lot 7 on RP 746150 with an area of 1849 m². The property is large, elevated and regular shaped, and has some boulders. The site has a gentle to moderate slope and affords views over part of Cooktown and the Endeavour River although the latter are restricted somewhat by trees and building on an adjoining lot. Access to the property is along a bitumen road. The property is serviced by power, telephone and town water. The land was sold on 5 May 1998 for $100,000. At the time, the only improvement was selective clearing worth $2,000. Mr Cotter analysed the sale to $98,000. He reported that the sale accurately reflected the market and he therefore applied a value of $95,000.
Mr Cotter considered the sale property to be superior to the appellant’s property because of its greater area, higher elevation and more regular topography. Although the sale property is approximately 600 m² larger than the appellant’s property, it is a single allotment with no potential for subdivision so that the larger area is adequately reflected in the higher sale price, he said.
The appellant said that the Sale 3 land was superior to her property - it is larger than her land, all the land is usable, there are spectacular views and, she thought, this land would not flood as badly as her property because it would not get the run-off from a road opposite, as her property does, and was possibly protected by boulders and trees on the properties above it.
Sale 4 is a residential block described as Lot 63 on C17924 with an area of 1100 m². It adjoins the western boundary of the appellant’s property. The sale property is a moderate to steeply sloping elevated block with rocky outcrops and river views. The property sold on 7 May 1998 for $85,000. At the time of the sale, access was via a washed out dirt track. The improvements consisted of benching, valued at $3,000, and clearing worth $2,000. Mr Cotter analysed the sale at $80,000 and applied it at $72,000. He considered the sale was within a range which accurately reflected the market. In his opinion the appellant’s property is slightly superior to this lot because of its greater area, higher elevation and more regular topography.
The appellant said that she considered that Lot 63 was very flat, because it was platformed and that the property would not be affected as badly by run-off storm water as her own property. This is because Lot 63 does not get direct run-off from Grassy Hill, as the water comes through her land before it goes on to Lot 63. Again the other evidence is that Lot 63 was not level, in its unimproved state. Both Mr Cotter’s evidence and the Cook Shire Council contour map indicate that parts of the property slope quite steeply.
Sale 5 is a 1290 m² residential lot described as Lot 67 on C17924. It is located about 50 metres north of the appellant’s property and adjoins the southern boundary of the property which was the subject of Sale 2. Power, telephone and town water are connected to Lot 67. It is a boulder strewn lot, which slopes down steeply from its gravel road frontage. Access is via a 60 metre formed gravel road. Excellent views of the river are afforded from the property. The property sold in August 1998 for $75,000. The only improvement was clearing which Mr Cotter valued at $2,000. He analysed the unimproved value of the land at $73,000 and applied a figure of $70,000. In his view, the sale accurately reflected the market.
Mr Cotter said that this block, like that adjoining it to the north (which was the subject of Sale 2) falls away very steeply from the road frontage. Overall, he considered the appellant’s property to be slightly superior because it has superior access and is suitable for benching.
The appellant said that she thought this property would be most comparable with hers in terms of flooding, although the run-off would not be as bad as it is on her property.
Section 13 of the Act requires the chief executive to decide the unimproved value of the land. In s.3(1) “unimproved value” is defined to mean -
“(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.”
It is well established that the best basis for determining the unimproved value of land, within the meaning of s.3(1)(b) is by comparison with sales of vacant or lightly improved parcels of land (Grahn v Valuer-General (1992) 14 QLCR 327 at 328; Barnwell v Valuer General (1989) 13 QLCR 13 at 17); Fischer v Valuer-General (1983) 9 QLCR 44 at 46.
This is the process which Mr Cotter has adopted. He gave evidence of five sales of lightly improved residential land in close proximity to the appellant’s land. All of those sales occurred within 18 months prior to the date of valuation. Mrs Mackay-Payne challenged the soundness of some of the sales, on the grounds that they were made to out of town buyers who were not familiar with the market. She was, however, unable to substantiate that statement. Mr Cotter said that Sales 1, 3 and 5 were to local people. Sales 2 and 4 were, generally speaking, in line with the prices paid by the local purchasers.
Two of the sales used by Mr Cotter, were particularly relevant in establishing the value of the appellant’s property. These are Sales 4 and 5. Both sales occurred within six months prior to the date of valuation. Sale 4 immediately adjoins the appellant’s property to the west; Sale 5 is four lots to the north of the appellant’s land. The properties are similar in size. Sales 1, 2 and 3 are of less relevance although they help to demonstrate that the market was rising. Sale 1 occurred some 18 months prior to the date of valuation. Sale 2 appears to have been at below market value. Sale 3 is clearly a superior property and it is difficult to draw comparisons with the appellant’s property.
The properties the subject of Sales 4 and 5 are described in more detail earlier in this decision. Apart from the issue of flooding, I have accepted Mr Cotter’s opinion that the appellant’s property is slightly superior to both. It is superior to Sale 4, he said, because the appellant’s property has a higher elevation, slightly superior access and larger area. It is superior to Lot 5, because the appellant’s property has superior access and is more suitable for benching. Sale 4 was applied at $72,000 and Sale 5 at $70,000.
I have also accepted Mrs Mackay-Payne’s evidence that her property is severely affected by water run-off during the wet season. However, with one exception, I am not satisfied that her property is more adversely affected than the other properties relied on in the sales evidence of Mr Cotter. Mrs Mackay-Payne was able to describe graphically the effect of the water on her property, but her knowledge of the sale properties and the effect on them of water run-off appeared to be limited and, in some cases, mistaken. The evidence she gave in this regard was not sufficiently persuasive to overcome the presumption created by s.33 of the Act, which provides that:
“33. Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.”
The one exception relates to the water coming from the unnamed side road opposite the Baird Road boundary of the appellant’s property. Mrs Mackay-Payne gave evidence that this run-off increases the volume of flooding onto her land although it appears that some of the water which goes through the garage, is not actually flowing across the appellant’s land, because part of the garage is built off the appellant’s land. This evidence concerning the run-off from the side road was supported by a letter from a Mr Chris Vandyke which was tendered by Mrs Mackay-Payne at the hearing. Mr Vandyke is a house designer familiar with the area. He states that, “The problem for [the appellant’s property] is exacerbated by run-off water from the side road directly opposite the block.” It appears that none of the sale properties are affected in a similar way. There is no indication that this additional source of water has been taken into account by Mr Cotter in his valuation. As this would directly disadvantage the appellant’s land, I have decided that some allowance should be made for this additional flooding. I have therefore allowed $3,000 for this factor.
At the hearing, Mrs Mackay-Payne emphasised the constraints imposed on the use of the property by the line of boulders running across it. Although the boulders on Mrs Mackay-Payne’s land obviously restrict the type of house that can be constructed, there is clear evidence that the other lots, the subject of the sales, are also strewn with boulders. Mrs Mackay-Payne did not produce sufficiently specific evidence to demonstrate that her property is more adversely affected than the other properties. In this respect therefore, she has not succeeded in displacing the presumption raised by s.33.
Apart from the flooding, the grounds of appeal concerned -
·The danger of cars running off Baird Road down the embankment on to the appellant’s land. There was very little evidence relating to this given at the hearing of the matter. Mrs Mackay-Payne reiterated her concerns as to the potential danger. Mr Cotter said that he had never heard of an accident of that nature on that stretch of the road. The evidence is not sufficient to warrant any finding as to the nature or extent of any possible disadvantage to the appellant’s property.
·There is no sewerage connected to the appellant’s property. This was not pursued further at the hearing. I note, however, that it appears from Mr Cotter’s report that there is no sewerage service to any of the sale properties. Therefore the appellant’s property is no worse off, in this regard, than any of those properties.
·There is no tarred road into the property and bogging occurs due to flooding from the road. Again, Mrs Mackay-Payne did not expressly pursue this matter at the appeal.
In his report, Mr Cotter described the access to Mrs Mackay-Payne’s property as follows:
“Easy access is provided from the bitumen section of Baird Road then across the gravel intersection with Flinders Street to the southern boundary of the property. Alternative access is possible off the gravel section of Baird Road to the north east section.”
There is some discrepancy between the two statements – Mrs Mackay-Payne speaks of bogging and Mr Cotter says that the access is easy. It is not entirely clear whether the bogging occurs on the appellant’s land, or outside it, possibly on the gravel intersection with Flinders Street. Mr Cotter specifically discussed the access to the appellant’s property and that of each of the sales properties. I am satisfied that he has taken into account the comparative advantages and disadvantages of the access to each of the properties, including the appellant’s, in forming his opinion as to the value of those properties, and therefore, that the valuation should not be disturbed on this basis.
Finally, it should be noted that the fact that there is a large increase over the previous valuations is not relevant, given that there is evidence of bona fide sales of comparable parcels to support the new valuations (Tow v Valuer-General (1978) 5 QLCR 378 at 381).
The chief executive determined the unimproved value of the appellant’s property as at 1 October 1998, as $75,000. For the reasons explained above, I am prepared to allow the appeal. The unimproved value of the land is determined at $72,000.
CAC MacDONALD
MEMBER OF THE LAND COURT
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