Marjason v Department of Natural Resources and Water

[2009] QLC 100

LAND COURT OF QUEENSLAND

CITATION:	Marjason v Department of Natural Resources and Water [2009] QLC 0100
PARTIES:	Joanne K Marjason (appellant)
v.
Chief Executive, Department of Natural Resources and Water (respondent)
FILE NO:	AV2008/0311
DIVISION:	Land Court of Queensland, General Division
PROCEEDING:	An appeal against an annual valuation of land under the Valuation of Land Act 1944
DELIVERED ON:	10 July 2009
DELIVERED AT:	Brisbane
HEARD AT:	Brisbane
MEMBER:	Mr RS Jones
ORDER:	The appeal is dismissed.
CATCHWORDS:	Valuation of Land Act 1944 – s.33 presumption of correctness of valuation appealed against – best evidence of value – use of improved sales – desirability of including potentially relevant sales evidence in valuation report
APPEARANCES:	Mr A Marjason, agent for the appellant Mrs T Johnson, principal legal officer, Department of Environment and Resource Management, for the respondent

Background

1. Ms Marjason, the appellant, has appealed against the assessment of the unimproved value attributed to her land by the respondent, the Chief Executive, Department of Natural Resources and Water. 

2. The appellant is the registered proprietor of a parcel of land located at 37 Burlington Street, East Brisbane, more properly described as Lot 173 on Registered Plan 11234, Parish of South Brisbane, County of Stanley.  The land comprises an area of 405m² and is designated “low medium density residential” under the town planning instruments for the city of Brisbane.  Consistent with that designation the land is being used for single residential dwelling purposes which, as at the date of valuation, was considered to be the highest and best use of the land.  All of the usual town services and amenities are available. 

3. The unimproved value determined by the respondent is $390,000.  The appellant’s estimate of unimproved value is $310,000.  The relevant date of valuation for the purposes of the Valuation of Land Act 1944 (VLA) is 1 October 2007.  The appellant was represented by Mr A Marjason, the husband of the appellant.  Mr Marjason was also the only witness relied on by the appellant.  The respondent was legally represented by Mrs T Johnson, a principal legal officer employed by the respondent and relied on the evidence of Mr A Van Hees, a registered real estate valuer also employed by the respondent. 

4. As the subject land was improved land for the purposes of the VLA it, pursuant to s.3(1)(b) of the Act, had to be valued on the basis that at the date of valuation the improvements thereon did not exist.  Pursuant to s.33 of the VLA the valuation appealed against is presumed to be correct and, accordingly, the onus is on the appellant to prove that it is wrong.[1]  In Brisbane City Council v Valuer-General[2] the High Court considered that the presumption in favour of the correctness of the statutory valuation may be rebutted when 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]     See also s.45(4) of the Act.

   [2] [1977-78] 140 CLR 41 at 56-57.

The issues in the appeal and the evidence

1. The evidence-in-chief led on behalf of the appellant was essentially the facts, matters and circumstances raised in the attachment to the appellant’s notice of appeal filed 22 July 2008.[3]  By reference to that document the case for the appellant was to the effect that, having regard to the sale of five improved properties located in the general vicinity of the subject and the unimproved value assigned to other land owned by the appellant which was also valued at $310,000 as at 1 October 2007,[4] the valuation of the respondent was excessive. 

   [3]     Exh.1.

   [4]     This land is located at 36 Antill Street, Wilston.

2. In regard to the evidence concerning the value assigned to the other land owned by the appellant, I place no weight upon it.  There is no evidence before me which would permit me to draw any meaningful conclusions about the unimproved value that ought to be determined for the subject land having regard to the value assigned to land located not only in a different suburb to the subject but also on a different side of the Brisbane River.

3. Turning then to the sales evidence relied on by the appellant, the first two sales are transactions involving family members.  That fact alone is sufficient to cause these sales to be treated with some suspicion.  The evidence of Mr Van Hees is that these sales were sold under market value and I accept his evidence about that.  Accordingly I place no weight on these sales. 

4. Turning then to the remaining three sales, two of those are located in the same street as the subject and the other is located nearby.  The difficulty I have with these sales is that they are all improved sales and there has been no meaningful attempt to analyse them to arrive at what the value of the land might be absent the improvements.  It also appears to me that the appellant has tended to confuse, when considering this sales evidence, the value the actual improvements on the land might have in the marketplace with the cost of replacing those improvements with a new dwelling but of a similar character.  On balance, I have reached the conclusion that little weight can be placed on the appellant’s evidence concerning these sales.

5. While it is arguable that there are already sufficient reasons for dismissing this appeal, I propose to deal briefly with the evidence relied on by Mr Van Hees.  I consider it desirable to do so because the appellant raised, albeit not in a very direct way, the prospect that there might be some premium attached to the sales relied on by him and, accordingly, that his valuation in some way offended the principles enunciated by the High Court in Maurici v Chief Commissioner of State Revenue.[5]

   [5] [2003] 212 CLR 111.

6. In arriving at his assessment of the unimproved value, Mr Van Hees had regard to two unimproved sales and three improved sales.  The three improved sales were located in the same street as the subject and one of those sales (65 Burlington Street) was also a sale referred to by the appellant.  Mr Van Hees’ analysis and application of these sales was not seriously challenged and I accept it.  However, it seemed to be suggested that the sales and, in particular, the two unimproved sales might involve some premium because of the relative scarcity of vacant lots in the inner suburbs of Brisbane. 

7. The High Court in Maurici determined that a fair estimate of value could only be made on the basis of a fair, that is to say, a reasonably representative group of comparable sales.  And a group of sales could not be said to be representative if it did not go beyond the sales of scarce vacant land.[6]  Maurici was considered by the Land Appeal Court in Department of Natural Resources and Mines v Spender.[7]  At paragraph [54] the Land Appeal Court said:

   “… the High Court reasoning, as we interpret it, was a recognition that the market for land in a predominantly built up area was not exclusively of scarce vacant land but inclusive of land with improvements thereon.  As each parcel of land in that environment, vacant or improved, was required to be valued in the statutory process, on the basis of relative value at the same date, albeit notionally as unimproved, it was wrong to adopt a basis of valuation selected exclusively from one segment of the market which in itself was not proved to be representative of the overall market for land.”

   [6]     At para 18.

   [7] [2002-03] 24 QLCR 414.

8. In this appeal, Mr Van Hees had regard to improved sales and unimproved sales which together, in his opinion, comprised a reasonably representative grouping of sales which supported the valuation appealed against.  His evidence about this was not shaken in any material way.  On balance I am satisfied that the sales contained in Mr Van Hees’ report and relied on by him were a reasonably representative group of comparable sales capable of providing the foundation for a fair assessment of the subject land. 

9. The appellant has produced no reliable sales evidence or other reliable evidence to support the level of unimproved value she contends for.  On the other hand, I am reasonably satisfied that in reaching his expert opinion, Mr Van Hees had regard to reliable sales evidence which was properly analysed and applied by him in his valuation exercise. 

10. For the reasons expressed above I have reached the conclusion and so find that the appellant has failed to prove that the valuation appealed against is wrong. 

11. However, before I go on to make the final orders disposing of this appeal I wish to address another matter raised by Mr Marjason.  Mr Marjason was critical of Mr Van Hees for not including in his basket of comparable sales the sale of 19 Burlington Street.  This sale occurred on 27 August 2007, comprised an area the same as the subject and is located in the same street as the subject.  Notwithstanding many of the attributes which would prima facie make this sale as reliable as any of the other improved sales relied on by Mr Van Hees, he did not refer to it in his valuation report.  When asked why the sale was not dealt with in his report, Mr Van Hees said that it was effectively ignored because it was, in his opinion, an inferior block involving a below market transaction.  Mr Marjason was clearly suspicious about this explanation. 

12. At the end of the day, in the light of the other reliable evidence Mr Van Hees had regard to I am prepared to accept that this sale was probably under market and should therefore be ignored.  However, it is not appropriate for a valuer to exclude from his basket of sales a sale such as this.  There is no reason why it could not have been raised in the body of Mr Van Hees’ report and dealt with an appropriate way.  It was not and it should have been.  Had this sale been included with a short explanation as to why it was disregarded, I am sure that this would have gone a considerable way to diluting the concerns of the appellant that the respondent was being inappropriately selective in the evidence he was relying on.

Order

The appeal is dismissed.

RS JONES

MEMBER OF THE LAND COURT