Lowe v Valuer-General
[2013] QLC 54
•30 August 2013
LAND COURT OF QUEENSLAND
CITATION: Lowe v Valuer-General [2013] QLC 54 PARTIES: Jennifer Lowe
(appellant)v. Valuer-General
(respondent)FILE NO: LVA723-11 DIVISION: General Division PROCEEDING: Appeal against annual valuation DATE OF HEARING: 14 February 2013
DELIVERED ON: 30 August 2013 DELIVERED AT: Brisbane HEARD AT: Toowoomba PRESIDENT: CAC MacDonald ORDERS: 1. The appeal is dismissed.
2. The unimproved value of Lot 5 on RP 894467 in the County of Aubigny, Parish of Ramsay, as at 1 October 2010, is affirmed at Eighty-nine Thousand Dollars ($89,000).
CATCHWORDS: Valuation - unimproved value - primary production use - conflict between respondent valuation and that of Australian Valuation Office (AVO) for social security - no evidence of basis for AVO valuation - respondent valuation preferred.
Land Valuation Act 2010
Barnwell v The Valuer-General (1989) 13 QLCR 13
Fischer v The Valuer-General (1983) 9 QLCR 44
Grahn v Valuer-General (1992) 14 QLCR 327APPEARANCES: Ms J Lowe in person
Ms T Johnson, Senior Lawyer, Department of Natural Resources and Mines
This is an appeal by Jennifer Lowe (the appellant) against the assessment of the unimproved value of her land, as at 1 October 2010, by the Valuer-General (the respondent) under the provisions of the Land Valuation Act 2010 (the Act).
The valuation of the subject property was initially issued at $111,000. Following Ms Lowe's objection, under the provisions of the Act, the valuation was reduced to $89,000. Ms Lowe's estimate of the unimproved value of the land as at the relevant date was $70,000.
At the hearing of the appeal, Ms Lowe conducted her case and gave evidence in support of her grounds of appeal. Mr BG Mahoney, a registered valuer employed by the Department of Natural Resources and Mines, who is currently based at Toowoomba, gave evidence on behalf of the respondent.
The subject land is described as Lot 5 on RP 894467, in the County of Aubigny, Parish of Ramsay, and has an area of 14.1 ha. The property is situated at Ramsay, approximately 14kms south of the Toowoomba Central Business District. The land is zoned Rural under the planning scheme for the Toowoomba Regional Council.
Mr Mahoney said that access to the subject property is gained via Breydon Road and consists of 150m of graded gravel road off Sawpit Road which is bitumen sealed with gravel and grass table drains. In Mr Mahoney's opinion good access is available to the subject land.
Electricity, telephone and mail delivery services are available to the property, Mr Mahoney said.
Ms Lowe said that her property is 20 kms from the town centre and 23 kms from the saleyards at Harristown. She uses the property for farming, running Dorper sheep, and since 2002, pastured pigs. She described the property as basalt with ironbark and eucalyptus cover. The property was contoured in 1997 to prevent water erosion, not with the intention of cultivating the land. There is only 1 inch of topsoil on a large part of the property.
Statutory Provisions
Section 5(1) of the Act requires the Valuer-General to decide the value of land as provided for under the Act for the purposes mentioned in s.6.
Section 7(b) of the Act provides that for rural lands the value of land is its unimproved value. The subject land is rural land and therefore it is the unimproved value of the land which is to be ascertained.
As the subject land is improved land, it is to be valued under s 26 of the Act. Section 26(1) provides that:
"26 What is the unimproved value of improved land
(1)If land is improved, its unimproved value is its expected realisation under a bona fide sale assuming all site improvements and non-site improvements on the land had not been made.
(2)However, the land’s unimproved value is affected by any other relevant provisions of this chapter."
Section 17 of the Act provides:
"17 What is the land’s expected realisation
(1)The expected realisation of land under a bona fide sale is the capital sum that its unencumbered estate in fee simple might be expected to realise if that estate were negotiated for sale as a bona fide sale.
(2) In this section -
unencumbered means unencumbered by any lease, agreement for lease, mortgage or other charge."
Section 18 provides:
"18 What is a bona fide sale
(1)A bona fide sale, for land, is its sale on reasonable terms and conditions that a bona fide seller and buyer would require assuming the following (the bona fide sale tests) -
(a) a willing, but not anxious, buyer and seller;
(b) a reasonable period within which to negotiate the sale;
(c) that the property was reasonably exposed to the market.
(2)For subsection (1), in considering whether terms and conditions are reasonable, regard must be had to -
(a) the land’s location and nature; and
(b) the state of the market for land of the same type.
(3) To remove any doubt, it is declared that if -
(a) there is a sale of the land in question; and
(b) the bona fide sale tests are complied with;
the sale is a bona fide sale.
(4) In this section -
land in question means land whose value is being decided."
As the land is currently used for primary production purposes, the subject parcel was valued by the respondent as farming land under s 46 of the Act which provides that any enhancement in the value of the land for industrial, subdivisional or any other purposes is to be disregarded.
Valuation Evidence
Mr Mahoney assessed the unimproved value of the subject property (14.1 ha) at $6,345/ha or $89,465, which he rounded to $89,000. He used the direct comparison method of valuation, relying on sales of properties purchased for primary production activities. Mr Mahoney said that he had ignored the sales in the immediate area of the subject property because those properties had been sold for rural residential purposes whereas the subject property was used for primary production. He said that if the subject property were valued as a rural residential property, it could be valued at $250,000.
Because there were no local sales of primary production properties, Mr Mahoney was forced to go further afield to locate sales comparable with the subject property. The only sales that Mr Mahoney was able to locate were improved properties situated further away from and larger than the subject land. He relied on three sales. In comparing the subject with the sales he weighed up the size, location and quality of the country of the properties.
Sale 1 is a 31.869 ha property located at Bridies Road, Greenmount, some 21.7 kms south-west of the subject property. The property sold on 12 October 2007 for $425,000 which Mr Mahoney analyzed to an unimproved value of $170,000 or $5,346/ha. He applied a value of $167,500 to the sale property, that is $5,267/ha or 98% of the analyzed value.
Mr Mahoney described the sale as gentle to moderate sloping open forest country with approximately two-thirds cleared to cultivation and now reverted to grass. A stock bore equipped with a mill, and a small dam are located at the northern end of the property, which is currently used for spelling horses.
Mr Mahoney said that the sale property was overall superior to the subject due to the larger area of the sale. However, the sale was inferior on a dollar rate/ha because it was further away from Toowoomba than the subject property.
Sale 2 is a 32.37 ha property situated on the New England Highway approximately 26kms south of the subject. The property sold on 27 May 2010 for $495,000 which Mr Mahoney analyzed to an unimproved value of $136,470 or $4,216/ha. Mr Mahoney applied a value of $116,000 to the sale.
Mr Mahoney described the sale property as undulating, fully cleared and cultivated valley plain. It is a fenced, regular shaped allotment with rural views.
Mr Mahoney said that overall the sale was superior to the subject because of the larger area of the sale. However he considered that the sale was inferior on a dollar rate/ha due to its location, in particular because the sale is further from Toowoomba than the subject.
Sale 3 is a 32.375ha rural property situated on the Felton-Clifton Road, in the locality of Nobby, approximately 37.3kms south-west of the subject. The property sold on 29 July 2010 for $405,000 which Mr Mahoney analyzed to an unimproved value of $148,235 or $4,635/ha. Mr Mahoney applied an unimproved value of $126,000.
Mr Mahoney described the sale property as regular shaped and comprising slight to moderate sloping arable forest country, fully cleared and cultivated with good rural views.
Mr Mahoney said that the sale was overall superior to the subject due to the larger area of the sale. However, the sale was inferior on a dollar rate/ha due to its location, the sale being further away from Toowoomba.
In Ms Lowe's opinion, the sales properties were superior to the subject property. She pointed out that all of the sales properties were much larger than hers. Mr Mahoney's response was that, although the sales are approximately double the size of the subject property, the sales were the smallest viable living areas for farming that he could find. Market evidence over the years has shown that the larger the property the less the rate per ha that is obtained and, vice versa, the smaller the property, the greater the rate per hectare obtained, Mr Mahoney said. Thus, even though the sales are further removed from the subject property and larger in area, the rate/ha on the sales properties is less than the rate/ha on the subject.
Ms Lowe said Sale 1 had a dairy farm close by which would mean that it was good land. Sale 2 had a house and sheds on it and Mr Mahoney had incorrectly stated its distance from the subject at 26 kms, whereas in fact it was 20 kms. The country around the sale area was very good quality and, in addition, a lot of vegetables are grown just over the highway which must mean that a good water supply is available.
Ms Lowe said that she lived on a gravel road which had not been graded this year (that is, 2011). There have been no Council services since the Toowoomba Regional Council took over the Cambooya Shire. She also pointed out that the distance of the subject property from Toowoomba as stated by Mr Mahoney was incorrect. However, Mr Mahoney said that that made no difference to his valuation.
Ms Lowe referred to the sale of a house and land of some 30 acres at Wicks Road, Ramsay. The property was sold for $455,000, the unimproved value is $207,000 and, Ms Lowe calculated, the remaining $248,000 represented the value of the improvements - a 4 bedroom house, bore, long driveway, shed, fencing, nursery, water reticulation etc. Ms Lowe said that this demonstrated that there was very little leeway for the value of the improvements given the unimproved value component of the total price.
Mr Mahoney said that the property at Wicks Road was very close to the subject, slightly smaller, and had sold in 2011. Because it had sold on the rural home site market, he had disregarded it in valuing the subject, which was valued on a primary production basis.
Ms Lowe stated in her grounds of appeal that the unimproved value of her property had increased by 222%. Her previous valuations were -
1/10/2000 - $17,800
30/6/2005 - $30,500
30/6/2007 - $46,000
30/6/2008 - $50,000
30/6/2011 - $111,000Ms Lowe said that property values in the area of the subject have decreased in the past three years. She said that the real estate market is stagnant and therefore she could not see why the unimproved value of the subject property would increase.
Ms Lowe produced a document comprising three sheets of paper, on one of which the market value of her property was assessed at $470,000 and on the second the market value was assessed at $400,000. The document in question was not dated but Ms Lowe said that it showed that the Federal Government valuation as at 31 January 2012 had reduced in value by $70,000 from the date of the previous valuation as at 5 August 2009.
It appears that the document was issued by the Federal Government in response to a request by Ms Lowe for a revaluation of her property (the subject property), for social security purposes, following the global financial crisis. The property had previously been valued by the Australian Valuation Office (AVO) at $470,000, and the value of the house and curtilage at $310,000 for private use. The AVO valued the property on 23 April 2012 and advised that the total value was $400,000, and the value of the house and curtilage was $300,000 for private use.
There is therefore a significant inconsistency between the values applied by the respondent Valuer-General and the information supplied by Ms Lowe from the AVO. The respondent's evidence is that the unimproved value of the subject has increased by $60,000 since the previous valuation 2008 whereas the AVO valuation shows the total value of the property had decreased by $70,000 between 2009 and 2012. In those circumstances it is understandable that Ms Lowe challenged the valuation in this case.
There are however various difficulties in the way of relying on the AVO valuation for the purpose of this appeal. The first is that that valuation appears to value the whole of the property including the improvements, whereas the valuation under appeal is made on an unimproved basis under the provisions of the Land Valuation Act. It is therefore difficult to compare the two valuations as they are not made on a like for like basis. The unimproved value of land may be assessed, under the Act, by ascertaining the improved value of the land and then deducting the added value of the improvements.[1] However that has not been done in this case. There is no evidence as to the added value of the improvements on the subject land and therefore the unimproved value cannot be calculated, using the AVO valuation figures, in order to compare the two valuations on a like for like basis.
[1] See s 25(2)(a) of the Land Valuation Act 2010.
The second difficulty is that there is no evidence as to the basis on which the Federal Government valuation was made. Mr Mahoney thought that it appeared to be a market valuation, whereas his valuation was made on a primary production basis under s 46 of the Act. While that may be correct, it does not provide an explanation as to why the primary production value might increase, when the market value appears to have decreased.
The third difficulty is that the valuer from the Australian Valuation Office who made the valuation, was not called to give evidence. Accordingly, there is no evidence as to how the AVO value was assessed, what sales, if any, were relied on or how any such sales were applied. I realize that calling the AVO valuer would possibly have involved considerable expense for Ms Lowe, but I can place very little weight on a valuation where the valuer who made the valuation does not give evidence.
The result is that, while the apparent inconsistency between the two valuations is unexplained and unsatisfactory, I do not consider that the appellant's evidence about the AVO valuation is sufficient to establish that the respondent's valuation is wrong. The appellant has the onus of proving her grounds of appeal under s 169(3) of the Act.
Conclusions
It is well recognized that the best basis for the assessment of the unimproved value of land is the use of sales of vacant or lightly improved parcels of land.[2] Ms Lowe produced evidence about one sale only. However Mr Mahoney's evidence, which I accept, was that that property sold on the rural home site market and, therefore, was not comparable with the subject which was to be valued on a primary production basis.
[2]Grahn v Valuer-General (1992) 14 QLCR 327 at 328 citing Fischer v The Valuer-General (1983) 9 QLCR 44 at 46 and Barnwell v The Valuer-General (1989) 13 QLCR 13 at 17.
The evidence adduced by the respondent was given by a registered valuer and was based primarily on three sales of improved properties. Mr Mahoney admitted quite freely that the sales were not directly comparable with the subject because of their location and size, but, he said, they were the best sales available for the purposes of valuing the subject for farming purposes. I consider that Mr Mahoney applied his professional judgment in analysing the sales and making allowances for the differences between the subject property and the sales properties. I have therefore accepted Mr Mahoney's evidence as to the analysis of the sales evidence and the application of that evidence. I find that the evidence given by Mr Mahoney supports the valuation as issued.
Section 169(3) of the Act provides that the appellant has the onus of proof for each of her grounds of appeal. Ms Lowe has presented no persuasive evidence to the Court in support of her submission that property values in the area have decreased over the past three years and that the real estate market is stagnant. As discussed above, I do not consider that the documentation that she provided from the Federal government assists proof of her case in relation to the determination of the unimproved value of the land under the provisions of the Act.
As the appellant has adduced no persuasive evidence to support her grounds of appeal, the appeal cannot succeed. Accordingly the appeal must be dismissed and the valuation by the Valuer-General affirmed.
ORDERS
1.The appeal is dismissed.
2.The unimproved value of Lot 5 on RP 894467 in the County of Aubigny, Parish of Ramsay, as at 1 October 2010, is affirmed at Eighty-nine thousand Dollars ($89,000).
CAC MacDonald
PRESIDENT OF THE LAND COURT
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