Lapanne v Chief Executive, Department of Natural Resources

[1999] QLC 77

[1999] QLC 77

 

 

LAND COURT

BRISBANE

23 JULY 1999

Re:     AV98-586

An appeal against an Unimproved Valuation
Valuation of Land Act 1944
  City of Cairns

John Lapanne

v.

Chief Executive, Department of Natural Resources

(Hearing at Cairns)

D E C I S I O N

As at 1 October 1997, the chief executive's assessment of the unimproved value of land described as Lot 20 on Registered Plan 819044, Parish of Sophia, containing 4049 m², is in the amount of $50,000.  The land is situated fronting Kenny Road, about 700 metres east of the township of Aloomba, about 6.5 km from the junction of the Bruce and Gillies Highways at Gordonvale and about 30 km south of Cairns.
           Access to the land is bitumen sealed.  Electricity, town water and telephone are connected.  The land is zoned "Rural".
           Mr Lapanne's estimate of the unimproved value, as stated in the Notice of Appeal, was $14,759.  That estimate represented the pro-rata equivalent of the valuation of $78,000 which the chief executive had applied to a block of 2.139 ha situated about 500 metres distant in Kenny Road (owned by Cairns Earthmoving Contractors Pty Ltd).
           Mr Lapanne attended the hearing and gave evidence in support of the appeal.  He explained how the subject lot had been created, after payment of various costs and contributions to the Council, from a reconfiguration of previously existing surveys.  The original amalgamated area had been 86.2616 ha including the subject land, all developed as a sugar-cane farm.  As at 1 October, 1997, that total amalgamated area  had been valued by the chief executive.  The cane farm had subsequently been sold with the subject land excised.  Mr Lapanne saw it as wrong that when that happened, two new valuations were issued, as at the same 1 October, 1997 date of valuation, one valuation for the balance area of the farm but still in the amount of $450,000, and the second for the subject land in the amount of $50,000.
           The first limb to the appeal was that the issuing of different valuations as at the same date was invalid.   Mr Lapanne suggested that, if the remaining amalgamated area after excision of the subject land, was still valued at $450,000, the subject land should have, by mathematical deduction, carried a nil valuation.
           If the first submission failed, which it does, because of the necessity to issue separate valuations for rating purposes, consequent upon the sale of the balance area, Mr Lapanne contended that the valuation of the subject land was out of relativity with the previously mentioned comparison block in Kenny Road.  He had investigated valuations placed on other lands (some of them non-rateable) in the township area of Aloomba and found the relativities and inconsistent increases over the previous valuation to be inexplicable. 
           He contended that the area of the subject land was excessive for a single dwelling.  However, at the time he sought to have the block resurveyed as a home site, the Council would not approve a subdivision of lesser area.  In the grounds of appeal, reference was made to the need to fill and consolidate the original cultivation land for the actual house site area and to raise it above existing levels to prevent water logging.  Mr Lapanne spoke of the septic drainage problems which have been experienced since a dwelling was constructed.  Because the land is adjacent to cane fields on all sides, it was seen as necessary to construct a two-storeyed house to obtain views and prevailing breezes.  An expensive fence was constructed in an unsuccessful attempt to exclude from the house yard, bandicoots and other pests which reside in the cane fields. 
           Mr Lapanne is concerned that an element of improved value has crept into the chief executive's unimproved valuations.  As I understood it, his argument is that land has a basic unimproved value, regardless of its use, and its value should remain constant regardless of the use to which an owner chooses to place it.  He contends that the cost of any external works at the expense of an owner, e.g. upgrading the access, provision of services, etc., should be taken into consideration in the assessment of unimproved value. 
           The valuer who had carried out the valuation appealed against was unavailable to defend it.  Instead, Mr G.F. Cotter, a registered valuer employed by the State Valuation Service, had investigated the matter, carried out an inspection of the subject land together with the relevant sales evidence, and formed the opinion that the valuation appealed against was correct. 
           Mr Cotter described the land as "near level ex-cane land with dark clay loam soils adjoined on two sides by cane farm.  Views are available to nearby mountain ranges".
           A schedule of five sales was tendered as the basis for the valuation.  Two of the sales were of small sites.  The first, a site of 1,330 m², zoned "Special Purposes", but capable of use for residential purposes, had sold for $30,000 showing an analysed unimproved value of $27,500 with an applied valuation of $25,000 at the relevant date of valuation.  The second sale of a site of 770 m², zoned "Residential 1", 3 km from the Gordonvale PO, was at a price of  $51,000, showing an analysed unimproved value of $48,400 with an applied valuation of $46,500.  Both those small sites were considered by Mr Cotter to be, to a varying degree, less valuable than the subject land.  The remaining three sales were of sites of 4,669 m², 4,147 m² and 4,047 m², at respective prices of $65,000, $67,000 and $140,000.  The first two of these latter sales were located about 9 km south-west of Gordonvale, the third about 2.5 km north-west.  For various reasons and to varying degree, each of the larger sale lots  were considered by Mr Cotter to be superior to the subject land.
           Mr Cotter was of the opinion that the subject land fell into the rural residential site category, where differing sizes of sites might have some effect on value, depending on the circumstances, but not on a pro-rata unit of area basis.  He had given consideration to the specific example of comparison raised by Mr Lapanne.  He accepted that in comparison, the valuation of $78,000 applied to that land might have subsequently been shown to be conservative, but at the relevant date there had been no comparable sales evidence of rural residential sites of around 2 ha to confirm that the land was more valuable.
           Nevertheless, Mr Cotter was confident that the valuation placed on the subject land was reasonable and took into account all features both positive and negative.

Conclusions

The evidence of Mr Cotter that sites with highest and best use for single dwelling purposes are bought and sold, not on a unit of area basis (e.g. a price per m² or ha) but on an individual site value basis, is consistent with numerous decisions of this Court and the Land Appeal Court.  The appellant's contention that the subject land should be valued directly in proportion, on an area basis, with the valuation of the larger 2.139 ha comparison site, would clearly give an inaccurate interpretation of the market for the subject land.
           Although Mr Lapanne suggested that there were blocks of about 4,000 m² being advertised and available for sale in the locality at prices cheaper than the sales quoted by Mr Cotter, he was unable to give any detailed evidence of sales which might have assisted the Court.  The only cogent evidence of market value came from Mr Cotter.  The valuation task before the Court is to determine the amount for which the subject land would have been capable of sale, if notionally unimproved, as at 1 October 1997.  While the maintenance of correct relativity is an important function of the statutory unimproved valuation process, relativity is not to be preferred as a primary basis of valuation, to a direct comparison of the land to be valued with the evidence provided by sales of vacant or lightly improved lands (see Fischer v. The Valuer-General (1983) 0 QLCR 44 at p.46). I am persuaded that the chief executive's valuation is realistic when comparison is made with Mr Cotter's sales evidence. I am persuaded that relativity of valuations is necessarily wrong in the examples put forward by Mr Lapanne.
           Mr Lapanne contends that elements of improved value are included in the chief executive's valuations.  It is, I think, worth repeating for his benefit, what the Land Appeal Court said in relation to the meaning of unimproved value, in Clough v. The Valuer-General (1981-82) 8 QLCR 70 at pp.73-74:

" A road, or service (sewerage, water  or electricity) are not in the strict legal sense appurtenant to a parcel of land.  They do not belong to it as a property right.  They do not pass with it as an appendage to its ownership.  In point of fact the land in the road is owned by the Crown.  Similarly the wires, pipes or drains exterior to the parcel (and in some cases within the bounds of the parcel) are owned by the relevant service authority.

No improvement which is not on the subject parcel or strictly appurtenant thereto can be considered an improvement for the purposes of ….. the Valuation of Land Act."

Then at p.75:

" We think it beyond doubt that what has to be valued is the subject parcel of land viewed as if the improvements thereon, visible or invisible, never existed but that otherwise the parcel was situated in the community (and environment) with the amenities and facilities that had grown up around it as at the date of valuation."

Finding
           The appeal is unsuccessful and is disallowed.  The chief executive's unimproved valuation of Fifty Thousand Dollars ($50,000) as at 1 October 1997, is affirmed.

RE WENCK
MEMBER OF THE LAND COURT