Ladewig v Department of Natural Resources, Mines and Water

[2007] QLC 47

LAND COURT OF QUEENSLAND

CITATION:	Ladewig v Department of Natural Resources, Mines and Water [2007] QLC 0047
PARTIES:	Alan R & Olwyn J Ladewig (appellants)
v.
Chief Executive, Department of Natural Resources, Mines and Water (respondent)
FILE NO:	AV2006/0465
DIVISION:	Land Court of Queensland
PROCEEDING:	Appeal against valuation.
DELIVERED ON:	22 June 2007
DELIVERED AT:	Brisbane
HEARD AT:	Mackay
MEMBER:	Mr RP Scott
ORDER:	The appeal is dismissed.
CATCHWORDS:	Valuation of Land Act 1944 – appeal against valuation – sales evidence preferred to relativities – locational differences considered.
APPEARANCES:	Alan R Ladewig for the appellants Ms C Liu, Senior Legal Officer, Natural Resources, Mines and Water, for the respondent.

1. As at a relevant date of 1 October 2005 and pursuant to the provisions of the Valuation of Land Act 1944 (the Act) the Chief Executive placed a valuation on land owned by the appellants in the amount of $900,000.  The appellants objected against that valuation and subsequently appealed against the outcome of that objection.  In due course the Chief Executive reduced the amount of the valuation to $845,000 in accordance with s.68 of the Act.  Pursuant to s.68(3) of the Act that reduced valuation becomes the valuation appealed against.  The reduction was said to take into account a rock wall located on the subject land which acts as a barrier against erosion from the sea and which is required to be maintained by the landowner.  The grounds of appeal were expressed in sufficiently wide terms to encompass the evidence adduced by the appellants and the challenges made to the valuation of the Chief Executive.  Mr Alan R Ladewig appeared for the appellants and gave evidence. 

2. The subject land is a residential allotment located at 58 Bourke Street, Blacks Beach more properly described as Lot 11 on RP 713050 Parish of Bassett.  Blacks Beach is a northern beaches suburb in the city of Mackay and is approximately 15 kilometres from the Mackay Central Business District.  All of the usual urban services and amenities are available to the land.  The land has a nominal area of 1,037 m² and is a long narrow rectangular shaped block which fronts Blacks Beach to which it has immediate access.  According to Mr Ladewig, approximately 8 metres of the length of the lot has been lost to erosion from the sea, however that threat has been minimised by the construction on the land of a substantial rock wall.  David John Doyle a registered valuer gave valuation evidence in support of the Chief Executive's valuation.  He estimated that about 60 m² of the subject land has been lost to erosion.  That estimate was not challenged by Mr Ladewig.

3. The land is zoned Special Activities (tourism) under the Mackay City Council Town Planning Scheme, has been improved by the construction of a residence and is used for residential purposes.  Accordingly, and pursuant to the provisions of s.17 of the Act, the land is to be valued as a single dwelling site.

4. Mr Ladewig mounted his case on the basis that the subject land was not in correct relativity to other statutory valuations applied by the Chief Executive in the Blacks Creek area.  He referred to a property at 26 Bourke Street which has an area of 989 m² and attracted a value of $650,000 from the Chief Executive as at 1 October 2005.  That property has a narrow direct access to the beach from part of its eastern boundary and a broader access over the common property of a group title plan development which it adjoins.  Its access is through that group title development by way of a right of way easement which is an advantage according to Mr Ladewig in that the property is protected from hooliganism and street noise from Bourke Street.  The subject property is not so protected and suffers noise from that source as well as vandalism such as the destruction of letter boxes.  Number 26 is protected from erosion from the sea by a similar rock wall to that located towards the rear of the subject property, though in the case of the relativity land the wall is not on the land itself but is on Crown land and is therefore maintained by the State.  Mr Doyle said that the proximity of the Group Title subdivision, which included a nearby tennis court, was a disadvantage to this property.

5. Mr Ladewig referred to 18 Sunrise Place which also has a statutory valuation of $650,000.  This relativity property is on a hill to the west of the Blacks Beach itself and does not enjoy direct access to the beach.  It is, I think, difficult to compare it to the subject property given this difference. 

6. Adjoining the subject land to its south is a residential property at 52 Bourke Street, Blacks Beach comprising three allotments.  This relativity land has a statutory valuation of $1,500,000 placed upon it, which Mr Ladewig roughly calculated to a value of $500,000 per lot.  Mr Doyle's evidence was, however, that the valuation of the three allotments was made pursuant to s.17 of the Act in that the use of the three allotments as a single residential dwelling required the valuation as a single residential site.  On this basis the relationship between the value of the subject property and 52 Bourke Street does not seem inappropriate.

7. Mr Ladewig referred to other relativity properties in the Blacks Beach area which he said demonstrated that the Chief Executive's statutory valuations were inconsistent.  The task of the Court in a matter such as this is to determine the value of the land the subject of the appeal.  That is achieved by applying valuation evidence to the property in question.  If all of the other statutory valuations in Blacks Beach are wrong or inconsistent with each other that cannot logically assist in determining the value of the subject property.  Neither is the Court charged with the responsibility of inquiring generally into valuations in the area and correcting them if they are found to be in error.  The Court's duty is to hear each appeal individually.  Correspondingly, if there is no appeal with respect to any individual property the Court should not purport to conclude a view as to the value of each such property.[1]

   [1]            See for example Wilson v Chief Executive, Department of Lands (1994) 15 QLCR 63 at 73 – 76.

8. I deal, below, with the valuation evidence provided by Mr Doyle in which he made reference to sales of properties located at Dolphin Heads.  Mr Ladewig expressed the view that it would be preferable for sales evidence from Blacks Beach to be utilised, but if there was a requirement to go further afield then evidence from Slade Point and Eimeo should be taken into account.  He referred to a number of properties in those locations including both improved sales and statutory valuations, however he drew no direct lines of comparison nor provided any analysis of the improved sales such that an unimproved figure could be identified. 

9. Mr Doyle included four sales properties in his valuation report three of which were unimproved.  Sale 1 is located at 22 Beach Road, Dolphin Heads has an area of 1,271 m² and sold in November 2005 for $1,200,000.  After the deduction of a nominal value for improvements Mr Doyle produced an unimproved figure of $1,197,000.  The applied value for the property was $1,150,000.  The sale land is a beach front property with excellent, uninterrupted ocean views.  The sale actually comprised two lots which were irregular in shape and would have suffered building restrictions owing to their individual size and shape.  The purchaser has amalgamated the lots as purchased into one block and has plans to develop a single residence on the amalgamated site.  On the basis of that, Mr Doyle formed the view that no premium was paid for the fact that there were two allotments in the sale.  In his opinion the sale land is overall superior to the subject property:  a conclusion which Mr Ladewig did not directly challenge. 

10. Sale two in Mr Doyle's valuation is located at 46 Beach Road, Dolphin Heads and sold in August 2005 for $550,000 which was analysed down to $548,000 unimproved by Mr Doyle.  The applied value was $530,000.  This sale fronts the mouth of a mangrove creek but has excellent, uninterrupted ocean views.  In Mr Doyle's opinion the sale is overall inferior to the subject property largely because of its inferior size and slightly inferior location.  Again Mr Ladewig did not directly challenge the comparison made by Mr Doyle. 

11. The third sale in Mr Doyle's valuation is located at 67 Corella Way, Blacks Beach though is located further to the south of the subject property than sales one and two are to the north.  The sale was transacted in June 2005 for $350,750 which was analysed down to $348,750 and applied at $345,000.  This sale land is in a new beachside subdivision and, whilst located on the esplanade, has no ocean views because of the presence of vegetated dunes to its seaward side.  It is overall inferior to the subject land in Mr Doyle's opinion –one agreed with by Mr Ladewig.  Mr Ladewig pointed out, however, that the applied value of $345,000 is substantially below the value applied to the subject property.  That is not surprising as the sale property is clearly inferior on the evidence.

12. It may be useful at this point to refer to some pertinent statements of principle made in Land Appeal Court cases. 

13. In Grahn v Valuer General[2] the Court recorded these propositions with approval:

    "(a)     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 and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, at p. 16 and cases cited in it."

    (e)     Whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence (WMand TJ Fischer v the Valuer-General (1983) 9 QLCR 44, at p.46."

    The importance of sales evidence in valuation cases as against the relativity between statutory valuations was stressed by Land Appeal Court in Clough v Valuer-General[3]

    "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.  The reason is obvious.  In applying such sales there is no room for error in analyzing the value of improvements."

    [2] (1992) 14 QLCR 327at 328.

    [3] (1981) 8 QLCR 70 at 76.

14. Having regard to the principles to which I have just referred, it is clear to me that the best evidence of value of the subject property comprises the three unimproved sales referred to by Mr Doyle.  I appreciate Mr Ladewig's point that it would be preferable to have sales from Blacks Beach as the basis of the valuation to those located in Dolphin Heads, however the question in issue is whether such locational difference that exists between Blacks Beach and Dolphin Heads is such that it would overtake the reliability of the sales evidence.  Mr Doyle acknowledged some small superiority in location between the sale number one and the subject property, however there is no other evidence indicating that the sales at Dolphin Heads fall into a class where location needs to be recognised as a dominant feature.  It has not been demonstrated on the evidence before me that the locational differences are such that they would impact upon the application of the sales relied upon by Mr Doyle in the valuation process such that the sales should be disregarded.  It seems to me that his sale number two provides a most suitable floor value in valuing the subject land and whilst sale number one is overall superior to the subject it certainly operates as a ceiling.  I see the third sale as being supportive only and a clear indication that the value ought to lie in the vicinity adopted by Mr Doyle. 

15. As a check method Mr Doyle introduced a sale at 66 Bourke Street, Blacks Beach.  That property sold in July 2006 for $930,000 and included a dwelling, a rock wall and ancillary improvements which Mr Doyle valued overall at $70,000.  He said that he understood the rock wall was located on the sale property given the location of survey marks that he observed during his inspection.  He expressed the view that overall the sale property is comparable to the subject and that it supports the application of $845,000 to the subject land.

16. The best evidence of valuation in this matter comprises sales one and two in Dolphin Heads included in Mr Doyle's valuation, those sales being supported by his sale three at Corella Way, Blacks Beach and the analysed improved sale at 66 Bourke Street.  I can place no reliance on the relativity of properties referred to by Mr Ladewig and on the properties referred to by him at Slade Point and Eimeo for the reasons I have given earlier.  Accordingly I am not convinced that the Chief Executive has proceeded on the basis of a wrong principle, a significant error of fact or has employed a method which was fundamentally erroneous.[4] 

    [4]            See Brisbane City Council v Valuer-General (1977-78) 140 CLR 41 at 56-57.

Order

The appeal is dismissed.

RP SCOTT

MEMBER OF THE LAND COURT