Knowlman v Chief Executive, Department of Natural Resources and Mines
[2001] QLC 74
•18 July 2001
LAND COURT BRISBANE 18 July 2001
[2001] QLC 74
Re:Appeals against Annual Valuations Valuation of Land Act 1944
Property ID No: 9091009, 9091007
Local Government: BCC-Sherwood (AV00-204 – 205, and AV01-115 - 116)
Ann M & James G Knowlman v.
Chief Executive, Department of Natural Resources and Mines
(AV00-205 and AV01-115)
And
Donald F and Dorothy H Knowlman v.
Chief Executive, Department of Natural Resources and Mines
(AV00-204 and AV01-116)
D E C I S I O N
Background:
These four matters relate to two parcels at 201 and 213 Dewar Terrace, Corinda, and described as Lots 1 and 3 on RP 77543 (AV00-204 and AV01-116) and Lots 1 and 2 on RP 46013, Parish of Oxley, (AV00-205 and AV01-115). 201 Dewar Terrace has an area of 3,490 m² and 213 Dewar Terrace has an area of 4,854 m2. The subject lands are only separated by one Lot, and are located about 1 kilometre west of the Corinda Local Shopping Centre, and 4.5 kilometres south of Indooroopilly Shopping Town. Both parcels are reasonably close to primary and secondary schools, and bus and rail services are at the Corinda Local Shopping Centre. Dewar Terrace is bitumen sealed with concrete kerbing and channelling, and all normal utility services are available. Dewar Terrace is a busy connecting road, providing alternative direct access to Oxley Road through the suburb.
Both parcels are designated as “Low Density Residential” under the Brisbane City Council’s Town Plan current at the effective dates of valuation at 1 October 1999 (AV00-204 and 205), and 1 October 2000 (AV01-115 and 116). The key issues are the nature of the land, views from the land, impact of river frontage, relativity and comparison of sales.
On 27 March 2000 the Chief Executive issued valuations for 201 Dewar Terrace at $390,000, and for 213 Dewar Terrace at $420,000 for 1 October 1999. Following objections the Chief Executive confirmed those figures on 1 July 2000. On 26 February 2001 the Chief Executive issued valuations for 201 Dewar Terrace at
$430,000 and for 213 Dewar Terrace at $460,000 for 1 October 2000. Following objections the Chief Executive confirmed those figures on 1 May 2001. The appellants have now appealed claiming the unimproved values should more properly be:
| Property | 1 October 1999 | 1 October 2000 |
| 201 Dewar Terrace | $355,000 | $355,000 |
| 213 Dewar Terrace | $380,000 | $$380,000 |
Following an unsuccessful Court supervised preliminary conference on 2 April 2001, the four appeals were heard concurrently on 26 June 2001. With agreement of all parties an inspection of the subject lands was undertaken. James G Knowlman appeared and gave evidence for the appellants. Mr Knowlman has been a property developer and builder for about 50 years and has extensive experience in assessing properties. Mrs R Trigge, Legal Officer, appeared for the respondent calling evidence from Daniel O’Connor, the departmental registered valuer accepting responsibility for the valuations. Mr O’Connor was not the original valuer for the 1 October 1999 valuation, but has reviewed that valuation and concurs in those unimproved values. Mr O’Connor was responsible for determining the 1 October 2000 valuations.
The History of the valuations:
Mr Knowlman advises that valuations of the subject lands have been of concern to the appellants for some time. The appellants concede that the subject lands are located in a good part of Dewar Terrace Corinda, and are both high quality river front lands. However Mr Knowlman argues that because of the nature of the subject lands, and their restricted physical access to the river, there has been a history of applications of high values extracted by comparisons with sales of land not fully comparable to the subject lands.
Mr Knowlman notes for example that in the early 90s the unimproved value of 213 Dewar Terrace had been increased to $530,000 because of sales of river front lands in the locality Following a subsequent sale of river front lands similar to the subject land, the then Valuer-General had reduced the unimproved value to $330,000, apparently recognising the differences that can exist in river front lands, where
physical access to the river is restricted. Mr Knowlman argues that a similar situation has now occurred in the current matters.
Mr O’Connor confirms that in analysing his sales for the 1 October 2000 valuation, he had concluded a rise in the property market of 10 percent since 1 October 1999, and he had applied that 10 percent to the unimproved values across most of Sherwood Division including the subject lands in arriving at his valuations of
$430,000 (201 Dewar Terrace) and $460,000 (213 Dewar Terrace).
The Nature of the Land -
It is agreed that the subject lands are large residential parcels which extend down to the Brisbane River. The eastern part of both parcels fronting Dewar Terrace each represent about 1,500 m2 of useable land for building purposes. 213 Dewar Terrace has a width of 40 metres to Dewar Terrace, while 201 Dewar Terrace is narrower with width of 22.2 metres. 201 Dewar Terrace is deeper towards the river. A contour map supplied (Exhibit 10) confirms that each site has an elevated building pad, at 201 Dewar Terrace about 53 metres AHD, and 213 Dewar Terrace about 48 metres AHD, which affords views to the west across the Brisbane River from those building sites.
It is also agreed that approximately the western two-thirds of each parcel slopes very steeply down to the river, and it is very difficult, if not virtually impossible, to get direct access to the river. That part of each parcel is agreed to ensure privacy only from neighbours. The steeply sloping lands are timbered, mainly with gum trees. The current views from either parcel are mainly through the existing trees, with only glimpes of the water. 213 Dewar Terrace has good views through trees across the river to the west to the Fig Tree Pocket Pony Club grounds. Views from 201 Dewar Terrace are more constrained by timber on the slopes, and also to the north and south. Mr O’Connor argues that the views would be capable of more expansion if timbers were removed on the steep slopes.
While the useable building area is similar on both parcels, the useable land on 213 Dewar Terrace is wider and less deep than 201 Dewar Terrace. Mr Knowlman explains that both dwellings have long existed on the site, as their family has owned the land, and others in Dewar Terrace, for many years. As an experienced builder Mr Knowlman concedes that if 213 Dewar Terrace was still vacant land, he may be able to improve the views slightly, but he argues the existing dwellings practically maximise the use of each parcel from a building perspective.
Mr O’Connor argues that Dewar Terrace is a good address in Corinda, and he feels that the location of the subject lands, their elevation and freedom from floods, privacy from the west by virtue of the direct access to the river, their large size, and their good views, all contribute to the valuable nature as properties. Mr O’Connor further advises that he has allowed in his valuation for the lack of access to the river on the subject lands.
Mr O’Connor speculates that if either subject parcel also had direct physical access to the river, in addition to their current features, then in his opinion, their unimproved value could be more than double their current unimproved values. He argues that with direct access to the river, if the land was to be valued on a pro rata basis of useable land, only one-third of which is elevated, the value would be between two and three times their current values.
Impact of Vegetation Protection Order -
It is agreed by both parties that the western part of each subject land, extending eastwards from the Brisbane River, is subject to Vegetation Protection Order RK01, effective from 31 March 1992. Mr Knowlman supplies a copy of the extent of that order showing the limits of the lands restricted. There was a difference of opinion about the height of that protected footprint. However scaling from the plan indicates that the eastern edge of the Protection Order extends to about reduced level 25 to 35 metres AHD as scaled from the contour maps supplied (Exhibits 6 and 10).
The Vegetation Protection Order extends to reduce level about 35 metres AHD on the recent sale at 227 Dewar Terrace, where the building pad is at an approximate height of 44 metres AHD. However the parcel between 201 Dewar Terrace and 227 Dewar Terrace has no Vegetation Protection Order restriction, and that land could thus be possibly subject to clearing right to the river’s edge. That would open up the views from 213 Dewar Terrace more towards the south-west.
Mr Knowlman argues that timbers along the river’s edge are up to about 30 metres in height, and any timber towards the eastern edge of the Vegetation Protection Order could extend in height to about 55 to 60 metres AHD, well above the current building pads on the subject land. Mr Knowlman argues it was unlikely therefore that clear unobstructed views could be obtained from the subject lands, unless the Vegetation Protection Order was relaxed to allow for the clearing of timber. It is the intention of both appellants to retain the existing timber, but the limitations for clearing to improve any views is a matter, in their own opinion, for consideration in the valuations.
Mr Knowlman agrees that the views across the river are good, but emphasises that views of the actual river itself are very small, being only glimpses through the trees. Mr Knowlman also notes that certain trees, such as the weeping figs near the front of the property between the subject lands, are also protected. He was therefore unsure whether there were any individual species of trees east of the Vegetation Protection Order which might also be unable to be cleared, should he wish to do so. However, he has no intentions to clear further timber on his land, clear of the Vegetation Protection Order footprint.
In respect of the impact of the Vegetation Protection Order Mr O’Connor notes the new Brisbane City Plan 2000 (October 2000), was introduced under the Integrated Planning Act 1997, and may have superseded the old Vegetation Protection Order. Under the new Brisbane City Plan 2000 there are two important planning codes affecting waterways, and lands adjoining those waterways. Mr O’Connor agrees that the new planning codes were most likely to seek to protect the corridor adjoining the Brisbane River across the subject lands. However his reading of those codes and guidelines indicate a more broad and vague approach to preserving the vegetation. He argues each application is considered individually on its merits, and it may be that some selective clearing to improve the views may be acceptable to the Council.
Mr O’Connor provides selected extracts from the Waterway Code and the Biodiversity Code. He agrees that protecting river aspects through pursuing the bio- diversity of riverfront lands was likely to be a key issue for Council. On that basis it was most unlikely that full clearing of all of the riverfront lands on either subject land would be acceptable. The resulting views of the actual river itself are therefore likely to remain only as glimpses.
To support his opinion about possible clearing of timber along the river’s edge, Mr O’Connor notes an example he is aware of in Hilda Street, Corinda. He notes the timber was cleared on a site right to the water’s edge, however he concedes that he was unaware whether that clearing had been sanctioned by the Council. Mr O’Connor also concedes that if the new codes of the Brisbane City Plan 2000 did relax any constraints formerly extant in the Vegetation Protection Order, then that would only relate to the 1 October 2000 valuation. Mr O’Connor also concedes that river views are seen as better than forest or city views in the market place.
Relativity -
It is agreed by both parties that the former relativity between the subject lands is appropriate, and has been maintained for some years. There is no difference between the parties that 213 Dewar Terrace is about $25,000 to $30,000 more valuable than 201 Dewar Terrace, mainly because of its greater width.
In respect of relativity with two adjoining parcels to the north of 201 Dewar Terrace, I note lands at 181 Dewar Terrace (2,656 m2 - $375,000 at 1.10.2000), and 187 Dewar Terrace (1,442 m2 - $345,000 at 1.10.2000). The former valuations at
1.10.99 had been 181 Dewar Terrace ($340,000) and 187 Dewar Terrace ($315,000). Mr O’Connor sees 181 and 187 Dewar Terrace as good Dewar Terrace lands without river views, and therefore a different submarket.
The unimproved value of 227 Dewar Terrace of area 1,507 m2 is $275,000 at 1
October 2000. That valuation was determined by Mr O’Connor as a split valuation of the former larger parcel following the sale of 227 Dewar Terrace in October 2000. Mr O’Connor advises that the existing relativities had been retained for each of the above parcels and the subject land. The 227 Dewar Terrace land had increased from
$250,000 (1.10.99) to $275,000 (1.10.2000). He argues those unimproved values are in true relativity with the subject land.
Comparison of Sales -
Mr Knowlman argues that it is inappropriate for Mr O’Connor to base his valuations upon sales that are not truly comparable. He notes for example that most of the sales used by Mr O’Connor for both annual valuations relate to lands which have direct access to the river, and therefore represent a different market segment. It is Mr Knowlman’s argument that the only truly comparable sale to the subject land is the sale of 227 Dewar Terrace. On that basis Mr Knowlman argues that it would be best to assess the unimproved value at 1 October 2000, and then maintaining relativity, reduce those values by 10 percent to determine the unimproved values at 1 October 1999. Mr O’Connor agrees that the sale of 227 Dewar Terrace is the most comparable for the 1 October 2000 valuation.
Mr Knowlman provides no other sales to support his estimate of valuations, relying upon Mr O’Connor’s sales. Mr O’Connor provides the following sales.
· For the valuations at 1 October 1999:
· Sale 1 – (16 Douglas Street, Sherwood - Lot 2 on RP 79400). This is a 1,624 m2 Residential Low Density parcel with direct frontage to the Brisbane River. The land slopes moderately from Douglas Street to the river, with a building
site at about 10 metres AHD. There are underground drainage easements along each side boundary to the river.
Much of the rear of the parcel fronting the river would be likely to be impacted by floods equivalent to the major flood in 1974. However in view of the current flood mitigation works upstream in the Brisbane River catchment, Mr O’Connor concedes that the current building site would be unaffected by a similar flood.
The sale has a shared access arrangement to Douglas Street and overall is considered inferior to either subject land, due to its shared access, smaller size, lower elevation and far inferior views of the river. The sale sold in October 1998 for $470,000, which was analysed at $467,000, and has a very conservative application of $370,000.
· Sale 2 – (32A Douglas Street, Sherwood - Lot 6 on SP 118159). This is a 843 m2 Residential Low Density hatchet shape parcel with individual access, but a shared concrete driveway with three other parcels. The sale originally sloped from Douglas Street towards the river, but the sale has no direct access to the river. The sale had some views of the river at the date of sale, but subsequent
to buildings on the intervening Lots, the sale now only has glimpses of the river between the two houses. There is an underground drainage easement from the sale to the river.
The sale is significantly inferior to either subject land, because of its smaller size, less elevation, inferior river views, and inferior access.
Sales 1 and 2 are close by each other and located about 650 metres north of the subject lands, among homes of similar quality to those adjoining the subject land. Sale 2 sold in August 1999 for $230,000, was analysed at $226,000, and applied at $198,000.
· For the valuations at 1 October 2000:
· Sale 1 – (164 Leybourne Street, Chelmer - Lot 164 on SP 114641). This is a 493 m2 Residential Low Density parcel with direct frontage to the Brisbane River. The sale is 2.7 kilometres north of the subject lands. The sale has an easterly aspect to the river, rises from Leybourne Street to reduce level 8 metres AHD at the building site, and then falls away to the river. All of the
land was likely to be impacted by a major flood of the intensity of the 1974 flood, and permitted buildings are design with car parking at ground level, and several storeys of residences above. The sale is very narrow (13.4 metres).
The sale is seen overall as inferior to both subject lands due to its smaller size, less elevation, and less scope of river views. Any jetty access to the sale would need to be 20 metres from an adjoining jetty. The quality of houses near the sale are seen as similar to Dewar Terrace.
The sale sold in May 2000 for $274,000, which was analysed at $273,000, and applied at $250,000.
· Sale 2 – (42 Rosebery Street, Chelmer - Lot 2 and 3 on RP 99666). This is a 2,749 m2 Residential Low Density parcel with direct frontage to the Brisbane River, and is located 3.4 kilometres north of the subject lands. The sale is an elevated flood free parcel with depth of 50 metres to the river and a 30 metre wide frontage and located in a prestigious street. The sale is smaller, less
elevated with less aspect of river views, but has wide river and street frontage with a flood free building area. The quality of homes near the sale are superior to Dewar Terrace. Overall the sale is far superior to the subject lands.
The sale sold in September 2000 for $1,350,000, which was analysed at
$1,353,000, and applied at $1,050,000.
· Sale 3 – (227 Dewar Terrace, Corinda - Lot 10 on SP 134295). This is a 1,507 m2 Residential Low Density parcel located 40 metres south of the subject land. The sale has similar frontage to the Brisbane River, similar river views, topography, elevation and location, but has a useable building site of only 500 m2. The sale overall is seen as inferior to the subject lands.
The sale sold in October 2000 for $300,000, which was analysed at $298,600, and applied at $275,000.
In addition to his Sale 2 (42 Rosebery Terrace) Mr O’Connor supplies two other sales merely to demonstrate the strength and quality of the river front lands in Rosebery Terrace. He notes for example that at 46 Rosebery Terrace, adjoining his Sale 2, a new dwelling upon 2,550 m2 was sold in November 2000 for $2,750,000. Another parcel at 50 Rosebery Terrace sold as vacant land of 1,609 m2 for $940,000.
Mr O’Connor notes that the sale of 42 Rosebery Terrace reflected $491 m2,
and the sale of 50 Rosebery Terrace reflected $584 m2. Mr O’Connor argues that those sales support that the river front lands have also increased by 10 percent, which supports his increase of 10 percent across the area. The sale of 50 Rosebery Terrace will be used in the 1 October 2001 valuation. Mr O’Connor argues that the applied unimproved values of the subject land reflect a significant discount because they cannot get direct access to the river.
Mr Knowlman argues that Mr O’Connor’s river front sales demonstrate his argument that direct river front lands with access to the river are not comparable to the subject lands. He notes for example that Sale 1 (164 Leybourne Street) sold for slightly more than Sale 3 (227 Dewar Terrace) but the parcels are entirely different. He argues that the land at 164 Leybourne Street is far inferior to the land at 227 Dewar Terrace in elevation, size, distance to neighbouring buildings, width of parcel, and impact of flooding. However the major advantage at 164 Leybourne Street is that it has direct access to the river. Mr Knowlman notes that both properties have similar
useable building areas of about 500 m2, and both are surrounded by similar quality homes.
Mr Knowlman also notes that the large disparity between the sales of 42 Rosebery Terrace ($1,350,000) and 227 Dewar Terrace ($300,000) further demonstrates the difference between lands with direct access to the river. Mr Knowlman concedes that 42 Rosebery Terrace has a larger building area and is in a superior location, but he argues a factor of more than four times the price of 227 Dewar Terrace demonstrates the advantage attached to access to the river. Mr Knowlman notes that 42 Rosebery Terrace is 30 metres wide compared to 15 metres at 227 Dewar Terrace.
In seeking comparisons between what is agreed to be the most comparable sale at 227 Dewar Terrace, Mr Knowlman draws comparisons in respect of the difference in width of the subject lands, and also their larger useable building areas. Mr Knowlman argues that as all three properties have similar inaccessible frontage to the river, similar elevation, location, and views of the river, the only additional factor to be allowed for is the impact of street frontage and useable area.
To demonstrate his method of estimating that additional premium, Mr Knowlman draws support from two adjoining parcels at 181 and 187 Dewar Terrace previously mentioned. Mr Knowlman notes the difference in area and frontage between those two parcels, and concludes rates of $1,670 per metre for additional frontage, and $24 per square metre for additional useable area.
Applying those two incremental differences Mr Knowlman then applies those rates to the applied unimproved value of 227 Dewar Terrace ($275,000) concluding a value for 201 Dewar Terrace at $312,000 and 213 Dewar Terrace at $342,000 at 1 October 2000.
Mr O’Connor rejects such a piecemeal approach to the valuations, noting that residential parcels are generally valued on a site basis and not on any pro rata basis. Mr O’Connor advises that the special nature of some market segments may demonstrate to the contrary,. He notes for instances that some prime river front lands can reflect a pro rata value, but there is no sales evidence in this locality to support such a conclusion. For that reason Mr O’Connor had compared the individual characteristics of each parcel, and concluded the unimproved values applied. Mr O’Connor argues that the lands at 181 and 187 Dewar Terrace are good lands, but they are seen as quality Dewar Terrace lots, but not lots with river frontage or river views. Mr Knowlman agreed 181 and 187 Dewar Terrace have no river views.
Mr O’Connor agrees that there are different markets for river front lands and river view lands. However Mr O’Connor notes that together with river front lands and other quality lands in close proximity to the CBD, river view lands are also in demand, and prices are rising. Mr O’Connor concedes that his sales at Douglas Street are not directly comparable, but he argues they were sales in close proximity of the subject lands, and he knew of no other comparable sales at the relevant period at 1 October 1999.
In respect of any other market evidence that might assist in differentiating river front lands from river view lands, Mr O’Connor notes sales in Westlake further upstream from the subject lands. In that locality he advises that there is a slight difference of perhaps 10 percent for river front lands with direct access to the river, compared to adjoining lands which only have views of the river across vegetated parkland, but with no direct access to the river.
Mr O’Connor argues that such differences are hard to discern in the market place, and advises that Westlake is a different market to Corinda, Sherwood and Chelmer, as river front lands at Westlake cost about $250,000 each. However there was no indication of the size of those river front lands at Westlake. Mr O’Connor also agrees that river front lands command a premium wherever they are located in the Brisbane area.
In respect of sales of possible flood prone lands, Mr O’Connor agrees that it is the market which determines the values that are paid. If people are tending to place less reliance upon records of previous floods, that is not a matter which should condition the adoption of prudent sales evidence. Mr O’Connor notes that he merely interprets the market and does not seek to condition his use of sales with his own personal opinions of risks associated with those sales.
Decision:
The nature of the land -
I turn first to the nature of the land and note that there is agreement with respect to the useable areas of each parcel, and that access to the river is virtually not available. There is some disagreement about the extent of views available, but the inspection confirmed that, while the views to the west across the river are good, they are not unobstructed and the views tend to be between trees. The views of the river itself are properly described as glimpses through the vegetation. However the river frontage and heavy vegetation does guarantee privacy from the west. The current
timber height and the level of the building pads virtually ensure that the current extent of views will remain.
The impact of the Vegetation Protection Order -
While the Vegetation Protection Order virtually prohibits the removal of all vegetation of any nature existing on a particular area of land so designated, I note that the new Brisbane City Plan 2000 was seen to possibly have modified that for the 1 October 2000.
I note that under the Brisbane City Plan 2000 compliance with the Waterway Code is considered in assessing any development in the Brisbane River corridor, and the code is used as a secondary code, particularly with the Bio-diversity code. The purpose of the Biodiversity code is among others to protect and enhance the City’s bio-diversity, protect or enhance wildlife habitats, and ensure protection of riparian vegetation in urban areas as a component of corridor protection.
Those guidelines further establish under performance criteria P1 of the Waterway Code, that where the natural functions of a waterway as landscape and environmental corridors must be preserved, then an acceptable solution is that no vegetation is disturbed on land among others that are covered by a Vegetation Protection Order. On the common understanding of those guidelines I accept that the preservation of vegetation along Vegetation Protection Order RK01 would continue to prevent further clearing in that corridor.
In respect of the Biodiversity Code itself, I note that supports the principles provided in the Waterway Code, and relevantly defines “an ecological corridor” and “a riparian zone”. The riparian zone specifically is seen to be the land on or immediately adjacent to a waterway, which directly influences a waterway form and function. As part of the Biodiversity code, any impacts upon the surface and ground water flow patterns of the waterways are also to be minimised. That code would also lead to a conclusion that clearing along the Vegetation Protection Order RK01 was unlikely. On that basis I see no reason for concluding that the views from the subject land could be enhanced by selective clearing.
Relativity -
If I look then at relativity along Dewar Terrace, and consider only the useable land component of each parcel, I find the following comparisons:
| Parcel | Useable area | Unimproved value 1/10/2000 |
| 227 Dewar Terrace | 500 m2 | $275,000 |
| 213 Dewar Terrace | 1500 m2 | $460,000 |
| 201 Dewar Terrace | 1500 m2 | $430,000 |
| 187 Dewar Terrace | 1,442 m2 | $345,000 |
| 181 Dewar Terrace | 2,656 m2 | $375,000 |
However I note that 181 and 187 Dewar Terrace have no views of the river, nor any privacy afforded by its contiguous nature with the river. While there is nothing in those relativities to indicate whether appropriate disparities between river front lands and lands without river fronts are correct, I believe the real comparison with the subject lands should be by comparing those with sales of land of similar nature.
I believe such an approach was followed in R and MM Barnwell v. Valuer- General (1990-91) 13 QLCR 13, where the Land Appeal Court 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.”
In respect of comparing parcels with panoramic views with parcels which have no views, I note that was rejected by the Land Appeal Court in Hans and Else Grahn
v. Valuer-General (1992-93) 14 QLCR 327, where the Land Appeal Court went on to say at page 330:
“The appellants fail on 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 residential purposes. As the Land Appeal Court said in its decision in the appellants’ previous appeal (H and E Grahn v Valuer- General (AV89-246 and 247, 13 December 1990):
‘For the purposes 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 comparison should take into comparison such matters as the
size of the lots, 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.’”
That principle also supports Mr O’Connor’s method of comparing the sale of 227 Dewar Terrace with the subject lands on an overall site basis. In approaching the current matters, I will accept Mr Knowlman’s suggestion that it would be wise to commence with the comparison of the most relevant sale at 227 Dewar Terrace for the 1 October 2000 valuation.
I accept that the approach adopted by Mr Knowlman of seeking to allow for the extra frontage and extra useable area, all else being equal, may seem logical to Mr Knowlman. However closer examination reveals that there is some inconsistency in allowing for two factors which by their very nature are linked. As Mr Knowlman was only considering the useable areas of land fronting Dewar Terrace, any allowance for width must also provide for any extra allowance for the additional area. The fact is that residential lands are not valued that way, and I must support Mr O’Connor’s approach of considering all of the features of a residential parcel as part of its overall site value.
If I turn to the sales at 42 Rosebery Terrace and 164 Leybourne Street, I find those are in an entirely different locality, but they are both lots with direct physical access available to the river. I note that the sale price at both sites are relatively not too dissimilar, being 42 Rosebery Terrace ($491 per square metre) and 164 Leybourne Street ($555 per square metre). The later sale at 50 Rosebery Terrace also reflected
$584 per square metre. I note those are much higher rates than an overall rate at 16 Douglas Street at $289 per square metre, and at 32A Douglas Street at $273 per square metre, although 32A Douglas Street is not river front land. That would also compare with an overall rate of $123 per square metre for 201 Dewar Terrace, clearly demonstrating the fallacy of seeking comparisons on a pro rata basis.
While the method of comparison used by Mr O’Connor is correct, whether he has then applied appropriate allowances in the difference between the sale and each subject land is a matter for consideration on the evidence.
(50 In respect of direct comparisons say between 227 Dewar Terrace and 201 Dewar Terrace, I note the only difference between those parcels is really their width and useable building area. The question then to ask, as did Mr Knowlman, is what would a prudent purchaser/vendor reflect for the difference in those attributes. If I
seek guidance from the agreed relative difference between the two subject lands themselves, I find for a difference in area of 1,364 m2, with all else being equal, represents $30,000. All of that extra land is really on the steeper unuseable slopes to the river. However both parties agree position or location is the key feature of any site, and people often pay almost as much for a smaller site as they do for a larger site in a key location.
On the above basis a difference of 1,983 m2 of steeply sloping land to the river
between 227 Dewar Terrace and 201 Dewar Terrace might also reflect about $30,000 in value between those parcels, in spite of 227 Dewar Terrace having a much smaller useable building area. On that basis something less than $305,000 might be an acceptable value of 201 Dewar Terrace at 1 October 2000. A similar conclusion could be made from differences in frontages between those two parcels. However even the appellants agree that 201 Dewar Terrace is at least $355,000 in value at that date.
Comparison of Sales -
In seeking further guidance from the sales provided, I agree with Mr Knowlman and Mr O’Connor that the sales at 42 Rosebery Terrace, 164 Leybourne Street and 16 Douglas Street all represent a market segment which is different from the subject land. The impact of direct access to the river is clearly demonstrated by the relative sale prices, particularly of 164 Leybourne Street and 16 Douglas Street. Both of those parcels are clearly inferior to the subject land in size, elevation, views, frontage and impact of flooding, yet 16 Douglas Street sold for $470,000 for 1,624
m2, and 164 Leybourne Street sold for $274,000 for 493 m2. Those parcels are
therefore not directly comparable.
If I then seek some relationship between 16 Douglas Street and 32A Douglas Street, I note both have similar features in terms of location, elevation and access, but 32A Douglas Street is only half the size with slightly inferior views, although the useable area above flood is similar. The difference in sale price suggests a factor of about 100 percent for direct access to the river at Douglas Street. I realise that does not accord with Mr O’Connor’s experience at Westlake, but as he notes Westlake is a different market area.
On that understanding perhaps the more relevant comparison with the subject lands might be 32A Douglas Street, which, while not fronting the Brisbane River, has glimpses of the River. Now the subject lands are larger, more elevated, with better
views, frontage and access and are clearly superior to 32A Douglas Street. The question is by how much superior?
If I accept the increase in the property market of 10 percent between 1 October 1999 and 1 October 2000, the subject lands at 1 October 2000 could then be compared against the unimproved values of 227 Dewar Terrace ($275,000) and an adjusted unimproved value of 32A Douglas Street (about $220,000). I also note Mr O’Connor sees 16 Douglas Street as overall inferior to the subject lands, although he has applied a very conservative application at 16 Douglas Street at only 79 percent of the analysed price.
Now the problem for Mr Knowlman is that his method for comparing the sale of 227 Dewar Terrace is not supported by the market place. I have therefore to accept Mr O’Connor’s comparison that the subject lands are superior to both sales at 227 Dewar Terrace and 32A Douglas Street.
In seeking guidance on the premium attached to both subjects, I turn to the relativities along Dewar Terrace. I note that 187 Dewar Terrace ($345,000) has a useable area of 1,442 m2, a frontage of about 27 metres, but has no river views or river frontage. The relativity between 181 and 187 Dewar Terrace is similar to the difference between the subject lands ($30,000). The premium attaching to both subject lands for their privacy from the direct river frontage, the river glimpses and the better views to the west across the river, would indicate that the subject lands both
have unimproved values greater than $345,000.
The sale of 227 Dewar Terrace for a much smaller useable area and frontage for $300,000 demonstrates, in my opinion, the additional value placed upon the river frontage and its associated views. I believe that represents something greater than the appellant’s opinion of perhaps only $10,000 to $40,000 for that attribute.
In seeking reliance upon relativity with adjoining land, I note the findings of the Land Appeal Court in Grahn v Valuer-General (supra) where it said at page 328:
“It is desirable that valuations made for the purposes of the Valuation of Land Act 1944 of comparable lands should bear proper relativity, one to the other, so long as 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 (R & MM Barnwell v. Valuer-General (1989) 13 QLCR 13 at 16 and cases cited in it.)”
Now while Mr O’Connor agrees that he had valued the subject lands on the basis of their not having direct access to the river, I believe his evidence indicates that he may have placed too much reliance upon the quality of the river views from those
parcels. Mr O’Connor has concluded that there may be some scope for further enhancement of the views through the trees. However as noted, I believe that was unlikely to occur, and the views extant at present are their likely potential. On that basis I would tend to agree with Mr Knowlman that the applied unimproved values may be too high.
Summary:
In the end I am left with only one truly comparable sale (227 Dewar Terrace) and an alternative method of comparing that sale by Mr Knowlman which has been shown to lack rigour. In this matter I am reminded that the onus to prove their cases rests upon the appellants under section 45(4) of the Act. The task therefore for the appellants is to demonstrate that the respondent has followed a wrong principle or has made a serious error of fact.
That was clearly established by the High Court of Australia in Brisbane City Council v. Valuer-General (1978) 140 CLR 41, where Gibbs J said at page 56:
“The question then is whether a court on appeal is bound to accept the Valuer-General’s figure as correct unless it is positively established that the true value is lower, or whether it is enough to show that the value was reached as a result of an error in principle. In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by section 13(7) is rebutted.”
Section 13(7) as it then was is now s. 33 which states:
“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.”
However in Brisbane City Council v Valuer General, his Honour went on to say at page 57:
“The effect of these provisions is that an owner on appeal to the Land Appeal Court has the burden of proving the grounds of his appeal, but not the burden of proving that the amount which in his opinion should be the valuation is correct. Obviously the court, if it allows an appeal, may determine the valuation at an amount different from that for which the owner contends.”
In the current matter the appellants have created some uncertainty in my mind that the chief executive’s valuations may be too high. But it is insufficient to discharge a burden of proof by simply raising such a doubt. It is not for this Court to
assume the role of an investigating tribunal, and those matters must be resolved upon the evidence before me.
That was clarified in Qualischefski v. Valuer-General (1979) 6 QLCR 167, where the Land Appeal Court said at page 172:
“However upon appeal a statutory onus of proof is cast upon the appellant, and he has to accept, within the confines set out in his notice of appeal to the Land Court, the burden of proving the Valuer-General incorrect. 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 contradiction 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.”
However in summarising the evidence I believe that there is sufficient guidance for me to conclude that the perceived potential for enhanced views may have influenced Mr O’Connor’s final assessment of the unimproved values. On that basis I will allow a reduction of $20,000 to reflect the impact of the existing Vegetation Protection Order upon any views towards the west.
Conclusion:
Having considered the whole of the evidence I am persuaded that the appellants have partly proved their cases. The valuations established by the chief executive are set aside. The unimproved values of Lots 1 and 3 on RP 77543 are determined at $370,000 (1 October 1999) and $410,000 (1 October 2000). The unimproved values of Lots 1 and 2 on RP 46013 are determined at $400,000 (1 October 1999) and $440,000 (1 October 2000).
MEMBER OF THE LAND COURT
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