Lim & Teoh v Chief Executive, Department of Natural Resources
[1997] QLC 43
•4 April 1997
|
BRISBANE
4 April 1997
Re: Appeal against Annual Valuation -
Valuation of Land Act 1944 -
Valuation Roll No: 15236
Local Government: Brisbane City
(AV95-508).
Cheng Jin Lim and Sally Teoh
v.
Chief Executive, Department of Natural Resources
D E C I S I O N
Background:
The key issues in this case relate to the impacts of traffic noise, shopping centre lighting, and parking upon the subject, and the use of percentage increases upon the valuation. The appeal relates to a residential property at 25 Tasman Street, Stafford Heights, and described as Lot 49 on RP 95268. The land is zoned as "Residential A" under the Town Plan of the Brisbane City Council dated 13 June 1987.
The lot is used as a single residence by the appellants with a medium-set, timber-framed, chamferboard-clad dwelling. The land is irregular in shape, with a south-western frontage to Tasman Street, and has an area of 645 square metres. It has easy access to Tasman Street, which is bitumen sealed with concrete kerbing and channelling. Utility services available to the lot include water, sewerage, electricity and telephone.
The land is located within a radius of 9 kms north of the Brisbane GPO, in a well established area of residential homes. It is approximately 100 metres west of the Rode Shopping Centre with good access to shops and a post office. It is within 1.2 kms south-south-west of the Craigslea State High and Primary Schools.
The land has a moderate slope falling approximately 3 metres from west to east, with a moderate elevation and some outlook to the north-east. A 0.3 metre stormwater drain traverses the land at its most southern point.
The Chief Executive, Department of Natural Resources, on 20 March 1995, issued a valuation notice of the property, with a date of valuation at 1 January 1995, to an amount of $65,000. Following an objection, the Chief Executive on 26 September 1995, reduced the valuation to $63,000 in recognition of the shape of the land and exposure to some traffic noise. The appellant has appealed against this figure and proposed that an amount of $60,000 would more reasonably reflect the unimproved value of the land.
Mr Lim appeared for the appellants, Mr R Paterson appeared for the respondent, calling evidence from Mr MW Cowley, the Departmental registered valuer who determined the valuation.
Evidence:
The appellants argued that traffic noise had increased considerably during daytime hours, and in particular during night-time. They claim that lighting from the nearby Rode Shopping Centre caused a nuisance to the property, and the parking of cars in Tasman Street caused difficulties which impacted the subject land. The appellants also claimed that the percentage rise in the valuation over recent years cannot be supported in view of the downturn in the property market. The appellants also raised a matter of impact upon the subject as a consequence of the de-commissioning and subsequent decontamination of a former Caltex service station on Lot 2 on RP 117943 to the north-east of the subject, and also to some possible future road widening in Appleby Road and Rode Road.
In respect of the impact of traffic noise, the appellants argued that traffic has built up over recent times to such an extent that during night periods there is considerable disturbance to the subject from heavy vehicles along Appleby Road. The respondent submitted, however, that records of traffic counts along Appleby Road, supplied by the Transport Department of the Brisbane City Council, indicate that there has been no increase in the volume of traffic during the day-time periods from 6.30a.m. to 6.30p.m., as determined by traffic counts on 5 February 1990, and another on 28 July 1994. Any impacts upon the subject were a factor included in the determination of the valuation of the subject. This, the respondent claimed, is reflected in the relativity between properties nearer to Appleby Road where valuations are lower and properties further west from Appleby Road where the valuations are higher. However, it was conceded by the respondent that he had no records of vehicle movements during night-time periods, when heavy vehicle traffic may have increased.
In the matter of the impact of lighting from Rode Shopping Centre, the appellants argued that glare from the lighting, while recently reduced, still is so bright that it dissuades prospective purchasers from the subject. The appellants conceded that the impact upon the subject does not have much effect because it does not get the "full blast" of the lights, which are of a fluorescent nature. The respondent noted that as the valuation is to be treated as unimproved in nature, any prudent purchaser would have designed the house at the time to accommodate any impact of the lighting.
In respect of the impact upon the subject of cars parked in Tasman Street, the appellants argued that this causes problems for the appellants, particularly with cars of people attending activities at the church on adjoining land to the east of the subject. Because of a lack of parking spaces at the church, and as the Rode Shopping Centre has recently ceased allowing church patrons to use their parking areas, the parking of cars in Tasman Street had increased to the extent that on occasions up to 20 cars can be parked in Tasman Street, particularly during periods such as Easter and Christmas. Mr Cowley noted that parking was considered in his determination of the valuation, and this was reflected in the relativity of values in Tasman Street.
In the matter of the appellants' claim that percentage rises in the valuation do not support the current market trend, the respondent noted that where comparable sales of vacant sites are available, previous decisions indicate that percentage variations are not an appropriate method of determining unimproved valuations. The respondent cited NR and PG Tow v. The Valuer-General - Redland Shire (1978)(LAC) 5 QLCR 378. The Land Appeal Court determined in that case at p.381:
"It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation. "
The above decision then leads to consideration of the sales of comparable parcels as a bona fide method of assessing the valuation. The respondent noted that the preferred method of comparing unimproved value is by comparison with sales of vacant land in the area. In this regard, he sought direction in PH Clough v. The Valuer-General - Caboolture Shire (1981-82) 8 QLCR 70, and H and E Grahn v. The Valuer-General (1992-93) 14 QLCR 330. Both cases established the principle that comparison with sales of comparable vacant land is the preferred method of establishing unimproved value.
The respondent provided evidence of four sales for comparison:
•Sale 1 -(54 Cremorne Road, Kedron - Lot 1 on RP 858750). This is a "hatchet shaped" rear allotment, located approximately 3 kms south-east of the subject, close to Gympie Road which is a major arterial road. The supply of utility services are similar to the subject, the zoning is "Residential A", and the area is 700 square metres. It has a moderate slope, falling from north to south, with moderate elevation, and little outlook. It is considered to be superior to the subject, and sold in July 1994, for $86,000, which after allowing $3,500 for improvements, provided an applied value of $80,000.
•Sale 2 -(5 Awaba Street, Wavell Heights - Lot 83 on RP 808959).
This is a regular-shaped lot with gentle cross-slope and moderate to good elevation, and is zoned as "Residential A". It is surrounded by well-established older-style homes of above average quality. All four utility services are available, and it has easy access to Awaba Street. The land is located approximately 4 kms south-east of the subject and has an area of 400 square metres and, because of its smaller size, is seen as inferior to the subject. It sold in March 1994, for $75,000 which, after allowing $1,000 for improvements, provided an applied value of $72,000.
•Sale 3 -(54 Fordham Street, Wavell Heights - Lot 4 on RP 865469).
The land is regular in shape with a gentle cross-fall from south to north. It has a relatively low elevation and is situated at the junction of two suburban streets. It has easy access to Fordham Street, all four utility services are available, and the parcel has an area of 450 square metres. It is zoned as "Residential A". The land is smaller than the subject and is less adversely affected by slope and noise than the subject, but because of its lower elevation and at a street junction, the sale is slightly inferior to the subject. The sale sold in September 1994, for $69,000 which, after allowing for improvements of $1,000, provided an applied value of $60,000.
•Sale 4 -(3 Rogers Parade West, Everton Park - Lot 10 on RP 204325).
The land is regular in shape, with a moderate to steep slope falling from west to east from the road. It has some elevation and outlook to the east, but suffers from traffic noise from nearby South Pine Road, and is zoned as "Residential A". Access from Rogers Parade is partially hindered due to the slope from the street. All four utility services are available, and the land has an area of 624 square metres. The sale is considered to be similar in value to the subject due to its topographical and traffic aspects. The subject is more detrimentally affected by noise but, this sale property is further from the amenities and the CBD. The sale sold in May 1994, for $67,000, and after allowing $1,000 for improvements had an applied value of $63,000.
The appellants did not dispute the sales evidence provided but were surprised that Mr Cowley had not used sales of improved properties nearer to Tasman Street. The appellants were unaware of the preference accorded to sales of vacant sites when determining unimproved value.
In respect of any possible impact upon the valuation of the subject, by the de-commissioning and decontamination of the former Caltex service station, the respondent rightfully drew notice to the fact that these did not form part of the notice of appeal and in fact had occurred subsequent to the date of valuation on 1 January 1995. Likewise the matter of any possible road-widening of Appleby and Rode Roads was also outside the jurisdiction of this current case for similar reasons. It was noted in passing that any such impacts, should they occur after 1 January 1995, would be considered as part of subsequent valuations.
Decision:
In respect of the impact of traffic noise, the evidence supports that Mr Cowley has considered this matter in determining his valuation, and this is reflected in the relativities between properties both to the east and west of the subject. In the matter of whether there has been an increase in heavy vehicle noise along Appleby Road during night-time, this has not been denied by the respondent, although daytime counts support no appreciable growth in traffic during the relevant period. On balance I feel there is insufficient evidence to adjust the current relativities on this factor.
In the matter of the impact of lighting from the Rode Shopping Centre, the appellant has conceded that the subject does not get the "full blast" of glare from the lighting and I feel that due consideration of this fact is included in the current relativities.
In respect of carparking in Tasman Street, while I believe that parking in that street is impacted by intermittent parking by patrons of the adjoining church, I am not persuaded that the severity of that impact has not already been accommodated for in the current valuation.
In the matter of large percentage increases in valuations over an extended period, I seek direction in NR and PG Tow v. The Valuer-General supra, which clearly discredits the use of percentage increases where comparable sales evidence exists. The sales evidence of the respondent was not discredited by the appellant and is accepted as supporting the current valuation. It is noted in PH Clough v. The Valuer-General supra:
"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. "
It is understandable for the appellants to be concerned how, in times of declining markets for improved properties, the unimproved value of land could remain steady, or even at times to increase. However, in Exhibit 4, the respondent gave evidence which demonstrated that for the Stafford and Stafford Heights areas during the relevant period from 1 January 1994, to 1 January 1995, while the actual number of sales declined, the average sale price remained about the same. Also during this period, in Exhibit 3, for the Division of Kedron, the respondent demonstrated that in respect of sales of vacant sites, while the number of sales declined by a factor of almost 50%, the average sale price for the vacant sites actually increased slightly.
In periods of depressed economic conditions, and low property sale prices, it could well be concluded that the decline in sale prices reflects only a decline in the value of the land. However, as noted in the Land Appeal Court decision in O'Brien Nominee Pty Ltd v. The Valuer-General (1979) 6 QLCR 280 at p.284:
"The basic properties have sold at prices considerably below the value of the improvements assessed on the traditional method of replacement costs less accrued depreciation. In such circumstances it is unrealistic to conclude that the land, the commodity basic to the enterprise, has a minus or nominal value. It is logical to assume that in times of adversity and depression, when purchasers pay less for properties as a going concern, that the lesser price attaches not only to the land component but also to the improvements. The question facing valuers in analysing improved sales in these circumstances is what value is fairly to be attributed to the improvements. "
While the Land Appeal Court was referring to a rural property in the O'Brien case, the impact of a depressed property market has similar application to residential properties in general.
Summary:
In determining amendments or alterations to the valuations, the onus of proof rests with the appellants under section 33 of the Valuation of Land Act 1944:
"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. "
I find that on the evidence applied, the valuer, Mr Cowley, has made due allowance for all matters raised by the appellant, and that his method of comparing the subject with comparable sales is sound and supports the current valuation. It would seem that part of the concerns of the appellant would be allayed if they had discussed the matters fully with the valuer, and if the valuation process had been fully explained to them.
Conclusion:
After having considered the whole of the evidence, I am not persuaded that the appellants have proved their case. The appeal is dismissed and the determination of the Chief Executive is affirmed.
(NG Divett)
Member of the Land Court
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