Limson Investments Pty Ltd v Department of Natural Resources and Mines
[2007] QLC 50
•28 June 2007
LAND COURT OF QUEENSLAND
CITATION: Limson Investments Pty Ltd v Department of Natural Resources and Mines [2007] QLC 0050 PARTIES: Limson Investments Pty Ltd
(appellant)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO: AV2005/0275 and AV2005/0728 DIVISION: Land Court of Queensland PROCEEDING: Appeals against annual valuations of land under the Valuation of Land Act 1944. DELIVERED ON: 28 June 2007 HEARD AT: Brisbane DELIVERED AT: Brisbane MEMBER: Mr RS Jones ORDER: Appeals AV2005/0275 and AV2005/0728 are dismissed. CATCHWORDS: Annual valuations under the Valuation of Land Act 1944 – ss.33 and 45(4) of Act – presumption of correctness of statutory valuations – onus of proof – best evidence of value – relativity with other unimproved values. APPEARANCES: Mr Y Limbada, for the appellant.
Ms C Lui, senior legal officer, for the respondent.
Background
Limson Investments Pty Ltd (the appellant), has appealed against the assessments of the unimproved value of its land by the respondent the Chief Executive, Department of Natural Resources and Mines. The valuations of the respondent appealed against are in the amounts of $1,250,000 as at 1 October 2003 and $1,600,000 as at 1 October 2004. The appellant's estimates of the unimproved value as at those dates is $800,000 and $865,000 respectively.
The subject land is located at 14 Oxley Avenue, Woody Point and is more properly described as Lots 1 and 3 on Registered Plan 66305 Parish of Redcliffe. The land is zoned "Residential D" under the town plan for the City of Redcliffe. All of the usual urban services and amenities are reasonably available to the land.
Under the "Residential D" zoning, mixed retail and residential development is permitted up to a height of eight storeys. Notwithstanding that zoning, as at the relevant dates of valuation, the improvements on the land consisted of older style single storey shops. Those improvements have since been demolished to make way for a development more compatible with the highest and best use of the land envisaged by its zoning.
In these appeals the appellant was represented by Mr Y Limbada, a shareholder of the appellant company. Mr Limbada has no legal, valuation or accounting qualifications but described himself as the company accountant. The appellant is a family company of which Mr Limbada's wife and other family members are directors and shareholders. The respondent was legally represented by Ms C Liu, a senior legal officer employed by the respondent and relied on the evidence of Mr James Corder a registered real estate valuer also employed by the respondent.
Issues in the Appeal
As the subject land was "improved land" for the purposes of the Valuation of Land Act 1944 (VLA), s.3(1)(b) of the VLA is relevant and provides:
"3.(1) For the purposes of this Act –
unimproved value of land means –(a) ……….
(b) in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.
(2) However, the unimproved value shall in no case be less than the sum that would be obtained by deducting the value of improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this Act."
Pursuant to s.33 of the VLA the valuations appealed against are deemed to be correct and therefore the appellant bears the burden of proving them wrong. Further, pursuant to s.45(4), the burden of proving every ground of appeal relied on also lies with the appellant. In Brisbane City Council v the Valuer-General[1] Gibbs J, as he then was, delivering the leading judgment of the High Court considered that the presumption in favour of the correctness of the statutory valuation may be rebutted where it can be shown that the valuation was based on a wrong principle and/or involved a significant error of fact and/or was made by a fundamentally erroneous method.
[1](1978) 140 CLR 41 at 56-57; see also G Cominos & Co Pty Ltd v Chief Executive, Department of Lands (1997) 16 QLCR 311 at 331 – 332 (LAC).
In reaching his assessments of the unimproved value of the subject land as at 1 October 2003 and 1 October 2004, Mr Corder had regard to a number of sales in the general vicinity of the land. There was no serious challenge, with an exception I will deal with below, to the analysis and application of his sales evidence.
The exception to which I referred above is in essence at the heart of the appellant's case. According to Mr Limbada, the subject land has been overvalued when regard is had to the unimproved value attributed to other land in the vicinity of the subject. In this regard my attention was particularly drawn to the unimproved values attributed to three properties being; 16-18 Woodcliffe Crescent, 6-12 Oxley Avenue and 26 Oxley Avenue. These three properties were referred to during the conduct of these appeals as properties C, D and E respectively.
The unimproved values assigned to each of these properties were:
C:$780,000 ($318/m²) as at 1 October 2003
$1,800,000($735/m²) as at 1 October 2004.
D:$1,500,000 ($877/m²) as at 1 October 2003.
$3,500,000($2,047/m²) as at 1 October 2004.
E:$5,400,000 ($827/m²) in 2005.
As at the relevant dates of valuation the subject land, while zoned Residential D, had no development approvals (DA) in place authorising more intensive development of the land. On the other hand, according to Mr Limbada, properties C, D and E all had DA's in place as at the dates of valuation and, in respect of property D, a building approval (BA) was also in place. Mr Corder was prepared to accept Mr Limbada's evidence about these matters. My attention was also drawn to the unimproved values attributed to another property located at 14 Woodcliffe Crescent but, I think it is fair to say that properties C, D and E were of most relevance insofar as far as the appellant's case was concerned.
Properties C and D adjoin the subject land and are also zoned Residential D. Property E is separated from the subject by a road, is zoned Local Business and has a hotel constructed on the land. Property D is also the subject of two sales relied on by Mr Corder in his valuation exercises.[2] All of these properties and the subject land have water views but properties C and D have significantly superior views and water access.
[2] Sale 1 for 01/10/03 valuation and sales 1 and 2 for 01/10/04 valuation.
According to Mr Limbada, the unimproved value of the subject land should be significantly reduced relative to the values attributed to properties C, D and E to take account of the fact that those properties had approvals in place as at the relevant dates of valuation and those approvals add significantly to the value of land.
According to Mr Corder, the existence of such approvals has only a minor impact on value. That is so according to Mr Corder because the zoning of the land is paramount and the relevant approvals would flow almost "as of right". Mr Corder however was prepared to acknowledge that having the approvals in place would attract some premium but, as I understand his evidence, the worth or value of that premium would be limited to the cost savings associated with not having to retain the experts necessary to complete the relevant applications, the saving of application fees and the avoidance of the delays associated with actually getting the approvals from the Redcliffe City Council. The best evidence was that this could take 6-12 months.
According to Mr Corder, the unimproved values attributed to the subject land are not inconsistent with the unimproved values attributed to properties D and E. However, he did acknowledge that the unimproved values attributed to property C were out of line with those for the subject land. This lack of relativity, in the opinion of Mr Corder, was not indicative of the subject land being overvalued but of property C being undervalued as a result of the departments broad brush "bulk valuation" system. According to Mr Corder the unimproved value of property C is likely to be increased in the next assessment of unimproved values for the city of Redcliffe, whenever that occurs.
Importantly, Mr Corder also considered that when he analysed the sales of property D he made sufficient allowance in the application of those sales to the subject land to take account of the overall superiority of that land and the fact that it had a DA in place as at its dates of sale.
While intuitively I might have some sympathy for the case as argued on behalf of the appellant, it produced no reliable evidence to support either the impact on land values DA's have or the levels of unimproved value contended for by it. It also failed to show that Mr Corder had had regard to unreliable sales evidence and/or had failed to properly analyse and apply that evidence when valuing the subject land. During the course of the proceedings, Mr Limbada referred to a valuation prepared for mortgage purposes in or about July 2002 by GD Trivett and Associates which valued the subject land, including improvements, at $850,000. The actual valuation was not tendered. In circumstances where the author of the valuation was not called I do not consider the evidence about it to be of any real assistance to the appellant. It was Mr Corder's opinion that in 2002 the subject land would have been worth about $850,000 vacant and, since 2002 the prices being paid for land in the Redcliffe area with water views had increased rapidly. That evidence was not seriously challenged.
In my opinion the appellant has failed to show that the valuations appealed against are wrong and ought be varied. Accordingly the order of the Court must be that the appeals are dismissed.
Orders
Appeals AV2005/0275 and AV2005/0728 are dismissed.
RS JONES
MEMBER OF THE LAND COURT
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