Leowenich v Chief Executive, Department of Natural Resources and Mines
[2001] QLC 63
•22 June 2001
LAND COURT BRISBANE 22 June 2001
[2001] QLC 63
Re:Appeal against Annual Valuation Valuation of Land Act 1944 Property ID No: 8009912 Local Government: Redland (AV00-84)
Anneliese and Bernd D J Loewenich v.
Chief Executive, Department of Natural Resources and Mines
D E C I S I O N
Background:
This matter relates to land at 91 to 99 Springacre Road, Thornlands, and described as Lot 14 on RP 887020, Parish of Cleveland. The subject land has an area of 9.808 hectares and is located about 6 kilometres south of the Cleveland business District, and about 26 kilometres from the Brisbane GPO. Good access is available to Springacre Road which is bitumen sealed. Electricity, telephone and garbage removal services are available. The subject land is zoned “Rural Non-Urban” under the Redlands Shire Council (“the Council”) Town Planning Scheme of 20 February 1988, effective at the date of valuation of 1 October 1999. The key issues are the nature of the land and comparison of sales.
On 27 March 2000, the Chief Executive issued a valuation of the subject land at $385,000. Following an objection the Chief Executive confirmed that figure on 23 June 2000. The subject land was valued as a rural residential home site under Section 17 of the Act. The appellants have now appealed claiming the unimproved value should more properly be $280,000.
Bernd Dieter J Loewenich appeared and gave evidence for the appellants. Mr K Fisher, counsel of Crown Law, appeared for the respondent, calling evidence from George Dudek, the departmental registered valuer now accepting responsibility for the valuation.
A preliminary point was raised by Mr Fisher in respect of any lack of reference to the existence of adjoining chicken sheds in the grounds of appeal relied upon by the appellant. However, in recognition of the lack of any previous appearance by the appellants in this Court, Mr Fisher agreed not to seek to restrict
evidence of those matters in order to ensure a complete hearing of the concerns of the appellants.
The Evidence:
The Nature of the Land -
The appellants agree that the subject land currently enjoys panoramic views towards Moreton Bay and the offshore islands from the current house site on the highest position on the land. Mr Loewenich also notes that the timber is protected by a Tree Preservation Order as part of the koala zone. It is the appellants’ argument that as the surrounding trees grow the views from the current dwelling will become increasingly restricted.
The major concern of the appellants however relates to the smells that emanating regularly and periodically from surrounding chicken sheds on adjoining lands. Mr Loewenich concedes that the locality is noted on the Council’s planning document as “For Poultry Farming Purposes”, and that he was aware of that agreed use when he purchased the subject land in 1998. However he argues that subsequently during periods of easterly prevailing winds for about 8 months of the year, the smell from the chicken sheds becomes overpowering, particularly during the regular disinfection process. He argues such disabilities must impact the value of the land.
Mr Loewenich concedes that about 85 percent of the subject land has been cleared prior to the introduction of the tree preservation restrictions. However he argues that even subsequent reclearing of regrowth timber is now prohibited. Mr Dudek had not made any special reference to the impact of the chicken sheds in his valuation reports, as the smell had not been evident during his inspection of the property. However he feels that similar impacts were likely to be experienced on surrounding properties, including the sales evidence discussed later.
Mr Dudek was aware of the presence of the chicken farms when he completed his valuation. Mr Loewenich argues that closer proximity of the adjoining chicken shed, which is only 5 metres from the boundary fence, results in a major impact upon the subject land. Mr Dudek advises that most of the properties in that area are used as rural residential home sites, although some are used for primary production purposes.
The Use of the Land -
Both parties agree that the subject land was used as a rural residential home site at the date of valuation at 1 October 1999. Subsequent to that date, Mr Loewenich advises that he now also grazes about 10 head of his own cattle as well as
a further 5 cattle for another person. It is his opinion that his income from his own cattle would represent about $700 to $800 per beast, or about $8,000 per year. There was no indication of any income from agistment of the other 5 cattle. However he has not so far considered an application to the respondent for a concessional valuation for “Farming” purposes under s 17 of the Act.
Mr Loewenich advises that initially the subject land had been used as a piggery. However as a result of complaints about the smells emanating from that purpose, the previous owner converted the property to use for cattle purposes. In his assessment of the cost of improvements upon the subject land, the appellants supplied a detailed list of improvements including sheds, machinery sheds, and other improvements for “Farming” purposes totally $166,000, plus a dwelling and tennis court ($252,000), giving total cost of improvements at $418,000. Mr Loewenich concedes that those costs represent his estimate of the cost of effecting the improvements, and may not represent their market place depreciated value. However they do demonstrate considerable investment in the potential to farm the land for grazing purposes.
Mr Dudek concedes that the land has some potential for possible use for “Farming” purposes for cattle, but argues that at the relevant date of 1 October 1999 there had been no use for cattle evident. Mr Dudek advises that should the appellant subsequently seek a concession under Section 17 for “Farming” purposes, that could be considered, but it is not a matter for consideration in the current matter. Mr Loewenich had enquired of the previous owner whether the business of cattle farming had been acceptable for recognition under s 17, but had been dissuaded that it probably did not meet the criteria necessary. However that had been prior to the amendment of s 17 on 1 October 2000, and may be worth pursuing at a later date.
Comparison of Sales -
In his estimate of the value of the subject land at $280,000, Mr Loewenich agrees that the appellants purchased the property at auction in October 1998 for
$506,000 and commenced occupation in August 1999. Because of the limitations placed on residential use as a result of the disability from the chicken sheds, Mr Loewenich estimates that the value has been reduced by about 40 percent, concluding a land value of $280,000. However he provides no evidence to support that conclusion.
To support his valuation, Mr Dudek provides the following sales of vacant lands, all zoned “Rural Non-Urban”:
· Sale 1 – (Platres Drive, Thornlands - Lot 2 on RP 98884). This is a 4.71 hectare parcel located almost adjoining the subject land to the north-west. The sale is regularly shaped with good access to Platres Drive, and is seen as similar in all aspects, but smaller in size, and therefore overall inferior to the subject land.
The sale sold in December 1999 for $350,000 was analysed at $350,000 and applied at $330,000.
· Sale 2 – (31 to 49 Eprapah Road, Thornlands - Lot 2 on RP 89552). This is a 8.933 hectare parcel located one lot removed to the south from the subject land. The sale is irregularly shaped, with low to medium topography, and reasonable access to Eprapah Road. The sale is similar in size and locality, but inferior in views and elevation. Overall the sale is inferior to the subject land.
The sale sold in April 1999 for $285,000, was analysed at $285,000, and applied at $275,000.
Mr Loewenich is familiar with both sales, and had in fact declined to purchase Sale 2 because of the excessive smells then apparent. The asking price at that time had been about $360,000 to $370,000. The sale was cleared but surrounded with tall trees, which tend to retain the smells upon that sale, particularly when winds subside.
Mr Loewenich agrees with Mr Dudek that Sale 1 (Platres Drive) was inferior to the subject land, but was unaware that that property had subsequently resold again in January 2001 for $465,000. Both parties agree that Sale 1 would tend to be less impacted by any smells from the surrounding chicken sheds, because it was further removed from the sheds, and is screened from the chicken sheds by trees.
Mr Loewenich also sought some support in relativity with parcels about the same size as the subject land, located further from the chicken sheds, but with unimproved values at about $300,000. However he was unable to identify those parcels specifically, and Mr Dudek rejects such generalisations as he notes that there could be many reasons why individual parcels differed in unimproved value. On that basis I get no assistance from such an approach.
Decision:
The Nature of the Land –
The difference between the parties lies in the relative impact upon the subject land of smells emanating from chicken sheds in the area. While Mr Dudek did not specifically mention the chicken sheds, he was aware of their presence when he completed his valuation. The impact of poultry sheds is well documented, and it is agreed that odorous smells will occur in such localities. However the question
needing to be answered is whether the subject land suffers those problems to a greater degree than what was likely to occur with comparable properties in that area.
It is agreed that Sale 1 was likely to be less impacted by the smells, but Sale 2 was likely to be impacted about comparable to the subject land. In fact Mr Loewenich advises that he rejected Sale 1 because of the smells. On that basis, Sale 2 may have even been impacted by the smells to a greater extent than the subject land.
A key difference in respect of the nature of the subject land is the presence of the panoramic views towards the Bay from the house site. In determining the value of a parcel of land the presence of distance views is often a feature that attracts buyers. Those views would be an important characteristic of the parcel for consideration, together with other physical features such as size, aspect, access and slope etc.
The Use of the Land –
While there is nothing to discredit Mr Dudek’s assessment of the subject as a rural home site at the date of valuation, and in fact the appellants agree they used the parcel for that purpose, the nature of improvements could indicate that the land might have a use for other purposes. Whether the appellants seek to take advantage of any concessional valuation that might eventuate from such an alternative use, is a matter entirely for the appellants at a future time. However it may be of assistance if I outline the current intentions of the Act in that respect.
Section 17 of the Act as it now stands since 1 October 2000, relevantly directs:
“17(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made.
(2) In subsection (1) –
‘farm improvements’ includes appropriate sheds, other structures, facilities, farm plant and land development for the particular farming business but does not include a dwelling or car accommodation.
‘farming’ means -
(a)the business or industry of grazing, dairying, pig farming, poultry farming, viticulture, orcharding, apiculture, horticulture, aquiculture, vegetable growing, the growing of crops of any kind, forestry; or
(b)any other business or industry involving the cultivation of soils, the gathering in of crops or the rearing of livestock;
if the business or industry represents the dominant use of the land, and -
(c)has a substantial commercial purpose or character by -
(i)having an average gross annual return, calculated over a 3 year period, of at least $5,000;
or
(iv)having -
(A)a minimum value of farm improvements or plantings of forest or orchard trees of $50,000; and
(B)the appearance of being maintained for farming or expenditure on crops, forest trees, maintenance of farm improvements, livestock or orchard trees; and
(d)is engaged in for the purpose of profit on a continuous or repetitive basis.”
The purpose of such legislation is to ensure that where an owner can satisfy the criteria, then the land is compared against similar “farming” lands. The outcome of such comparisons usually results in a lesser value for the land.
Comparison of Sales –
In comparing Mr Dudek’s sales, I find nothing to discredit his assessment of the unimproved value of the subject land. Sale 1 is agreed to be inferior because of its size (about half of the subject land) and the better views of the subject land. On that basis the subject land must be valued greater than $330,000.
While the resale of Sale 1 at a later date for $465,000 is not a matter for consideration at 1 October 1999, it does indicate what the market place would pay for a 4.71 hectare site in January 2001. However such higher price probably reflects an increase in the overall market itself.
In concluding any comparisons with Mr Dudek’s sales, I am reminded that as a registered valuer Mr Dudek uses his wider experience to determine the variations appropriate to each lot. Indeed that is the role of a valuer, which was noted in Brewarrana Pty Ltd v Commissioner of Highways SA (No. 1) (1973) 32 LGRA 170 where Wells J said at page 179:
“It is general valuation practice for sales characterized as comparable sales to be used as bases for the valuation of lands said to be similar. But allowances must always be made before such sales can be so used
… Before using any allegedly comparable sale, therefore, the valuer must consider whether, having regard to the circumstances (using that word in its broadest sense) appertaining to the parcel of land in question, and to the transaction of sale, there are sufficient similarities to the circumstances appertaining to the subject land and to the notional sale presupposed by the test formulated in Spencer v Commonwealth of Australia and in later cases to warrant a court’s reasoning from the sale price paid under the allegedly comparable sale, with or without other evidence, to a value for the subject land. … there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. … some adjustment is always necessary; too much adjustment will render it unsafe to use a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method. … the assessment of the risks of adjustment is peculiarly within his (the expert valuer’s) sphere of skill.”
Summary:
In summarising this matter I am reminded that the onus to prove their case is placed upon the appellants under s 45(4) which, in referring to a notice of appeal states:
“45(4) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner.”
In the current matter I find that the appellants have not discharged that responsibility.
Conclusion:
(25)Having considered the whole of the evidence I am not persuaded that the appellants have proved their case. The appeal is dismissed, and the unimproved value of Lot 14 on RP 887020 as determined by the Chief Executive in the sum of $385,000 is affirmed.
NG DIVETT MEMBER OF THE LAND COURT
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