McDonald v Department of Natural Resources and Mines
[2007] QLC 34
•20 April 2007
LAND COURT OF QUEENSLAND
CITATION: McDonald v Department of Natural Resources and Mines [2007] QLC 0034 PARTIES: Neal R, Rosemarie E & Thomas A McDonald
(appellants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO: AV2005/0692 DIVISION: Land Court of Queensland PROCEEDING: Appeal against Unimproved Valuation DELIVERED ON: 20 April 2007 DELIVERED AT: Brisbane HEARD AT: Ipswich JUDICIAL REGISTRAR: Mr BR O'Connor ORDER: The appeal is dismissed. CATCHWORDS: Valuation –use of sales – relativity – allowance for school adjacency.
Evidence – expert witness – relationship to party – whether partisan.
Practice & Procedure – exchange of expert reports – reciprocity.
APPEARANCES: Mr B McDonald (Agent) for the appellants.
Mr W Isdale, Counsel, Crown Law for the respondent.
This is an appeal against a determination of unimproved value of the Chief Executive, Department of Natural Resources and Mines (respondent), for valuation of Valuation of Land Act 1944 (the Act) purposes, of land situated at 5A Arthur Street, Woodend, Ipswich. The land has an area of 2630m², is used for single-unit residential purposes and has been valued as such. The relevant date for valuation is 1 October 2004.
The respondent contends for an amount of $162,500.00 while the appellants estimate stated in their notice of appeal is $71,000.00. Evidence for the respondent was given by John Mauchline, a valuer in the employ of the respondent. After a court ruling on a preliminary issue (see below) evidence for the appellants was given by Mr Neal McDonald. His brother Brian McDonald, while a qualified valuer, was restricted to the role of agent in these proceedings.
Preliminary Issues
Counsel for the respondent raised two preliminary issues of a legal nature prior to the commencement of the substantial valuation hearing.
The first issue related to the requirement to exchange reports of expert witnesses in advance of the hearing as required by s.23 of the Land Court Rules 2000. The relevant parts of this provision state:
"Expert evidence
23.(1)A party who intends to call a person to give evidence as an expert witness must serve on each other party a statement –
(a)giving the name and address of the witness; and
(b)describing the witness' qualifications to give evidence as an expert; and
(c)containing the witness' evidence for the hearing.
(2)A party must comply with subrule (1) at least 21 days before the date set for the hearing or, if the court directs a different time, within the time directed by the court.
(3)A party may not, except with the leave of the court or with the consent of each other party, call evidence from a witness as an expert unless the party has compiled with subrules (1) and (2)."
While the respondent had sent the written report of his valuer to the appellant in the week preceding the hearing, the written statement of the appellants' valuer was presented to the respondent on the morning of the hearing. The respondent claims this was an unfair strategy and that the report should not be admitted in evidence.
The second issue related to whether the valuer proposed to be called on behalf of the appellants could present evidence giving expert opinion. The concern was that while this valuer, Mr Brian McDonald, was in fact a qualified valuer he was a brother of the appellants and was thus perceived to be a partisan expert witness.
After considering argument from both sides on these issues I ruled that Brian McDonald should not give expert evidence or tender his statement but was able to act as an advocate/agent in the case. The arrangement was that his brother Neal McDonald, one of the co-owners, would give factual evidence with Brian being able to make submissions (as agent) on the overall evidence presented to the Court. Under this arrangement he could not express any opinions in a professional valuation capacity.
Both respondent and appellants were content to proceed with this arrangement to enable the case to advance without the need for any adjournment.
Grounds of Appeal
The appellants state their grounds of appeal as follows:
1. Insufficient allowance was made for disabilities to the property.
2. Out of relativity was surrounding properties and sales quoted.
3. Not valued correctly in accordance with the Valuation of Land Act 1944.
The appellants are limited to these grounds – s.45(4) of the Valuation of Land Act 1944.
Principal Issues
After hearing evidence it appears there are three main issues for determination in this matter:
1.Has proper allowance been made for the location of the subject property, being adjacent to St Edmunds College a large secondary school for boys.
2.Do the sales relied on by the respondent provide an adequate basis for his valuation.
3.Is the respondent's valuation in proper relativity with surrounding properties.
At the hearing there was no specific argument as to why the respondent's valuation was not correctly valued in accordance with the Valuation of Land Act 1944.
1.Location disability
The appellants claim that a large historic residence (Pender House) was relocated in 1996 on a vacant area next to the subject land. Pender House is now used for certain school activities (library etc) by St Edmunds. While the land on which Pender House is now located was previously part of the college, the appellants argue that the present situation is more intrusive on their privacy. They claim a further allowance should be made in the valuation adopted.
Mr Mauchline states he was mindful of the subject's location next to the school, was aware of the Pender House situation and made an overall deduction of 15% to allow for these factors. Mr Mauchline makes the interesting and, I consider valid, point that the impressive Pender House structure (as opposed to the activities conducted thereon) could be considered to be an enhancing factor adjacent to the subject. Mr Mauchline specifically calculates that a figure of $185,000 can be justified for the subject free of school influence; with a 15% deduction a figure of $162,500 results.
While no specific sales evidence was led by either side as to the effect school adjacency may have on values, it is noted that the respondent was the only party to adduce professional valuation evidence. While principally a matter of professional judgment, I consider the allowance of 15% to be reasonable in present circumstances.
2.Sales
Mr Mauchline relied on two main sales to support his pre-discounted figure of $185,000.
(a) 14 Lingard Street, Woodend; parties Carson Properties to B & D Consulting date of sale 3/10/2003; area 1308m²; sale price $205,000; applied figure as at 1/10/2004 $162,500. Mr Mauchline considers this sale inferior to the subject property – inferior in location and in particular the nature of the land which he describes as:
"the subject property has a far superior elevated position with partial views from the rear of the site to the south and the central business district; the contour of the sale property is inferior to the subject property and is traversed by a natural stormwater run off at its rear boundary. The sale property has a recorded history of flooding and water problems."
(b) 10A Campbell Street, Woodend parties Hansen to Jakobs Management date of sale 5/11/2004; area 2873m²; sale price $155,000; applied figure $130,000. Mr Mauchline sees this sale as inferior to the subject – the subject being superior in location and the sale property being at the rear of an access by easement. He describes the comparative nature of the lands as such:
"The sale property is a poor site in comparison to the subject it has difficult contour, falls approximately 5-6 metres below the road surface and has suffered water run off in the past. The sale property is further hindered in that it adjoins a well established bat colony and suffers the usual impediments such as noise and pollution associated with bats. The sale property is half located within a mining influence area and half within a known undermined area … The subject rises from the road frontage to provide a substantial elevated building platform located midway on the site. The sale property has no views and adjoins a gully."
While the sales may not be ideal, they do provide the best available evidence of the level of valuation as at the relevant date of larger vacant residential lots in the surrounding area. No conflicting evidence was led by the appellants nor was any sustainable attack made on such sales evidence. In my view, these sales provide a sufficient basis for a preliminary valuation of the subject property at $185,000 (with a further discount of 15% for school proximity).
3.Relativity
While Mr Mauchline relied on the two above sales as is primary evidence he also led evidence to the values applied to nearby properties to support his claim that the subject was in proper relativity to these. The five blocks used for relativity purposes and Mr Mauchline's comments are as follows:
"Property A
This property is adversely affected by its corner location and exposure to three school properties.The value assessed as @1/10/2004 was $150,000. An objection was lodged and subsequently reduced to $148,000.
Lot 18 I1621 on the corner of Mary Street and Arthur street is a small corner lot having an area of only 809 m². This property is considered to be far more adversely affected by the proximity to three school complexes i.e St Edmunds, St Mary College and St Mary's primary school. This valuation was not contested any further.
Property B & C
These properties are directly across the main entry to "Pender House" and side entry to St Edmunds College. An objection was lodged on property C for the 1/10/2004 valuation and it was decided to reduce the value from $143,000 to $140,000. Property B was also reduced in line with the decision above to maintain uniformity. The properties on the southern side of Arthur Street fall below the road and are far inferior to the subject property.
Property D
The value assessed for this property on the 1/10/2004 revaluation was $152,000 this was not contested and is considered inferior to the subject property. The property is a smaller lot having an area of only 607 m². This property also suffers from its closer proximity to Ipswich Boys Grammar. This valuation was not contested.
Property E
This property is a rear battleaxe block that has been assessed taking into consideration the problems associated with the proximity to the schools i.e. the lack of parking the pollution caused by school kids etc. The value assessed at $143,000 which was not contested on the 1/10/2004 revaluation was considerably discounted for its proximity to the school.
It is generally accepted that a rear site, given the peculiarities of each property is usually expressed as a percentage of a standard, near or similar sized front lot, and variations and adjustments are taken from there. This property has a small access way to the large land area at the rear. It was not possible to gain access, it may be necessary to review this property in 1/10/2007 as it is possible the property has views not accounted for."
I make the following observations on these comparative properties:
· They all suffer to a significant degree from school influence similar to the subject – so that the comparison is with the discounted figure applied to the subject of $162,500;
· Properties B and C are much smaller than the subject and are on the low side of Arthur Street –it thus seems they set an absolute minimum value from which to compare the subject;
· Property D has a slightly smaller frontage than the subject and a very much smaller area, yet it is valued at $152,000;
· Property E is the rear battleaxe lot next to the subject and close to the school; it is smaller than the subject but accessed only by means of a small access way; it has no street frontage apart from this access way, yet it is valued at $142,000.
These factors, individually and cumulatively, lead to the conclusion that the subject is in proper relativity.
Conclusion
In summary, I conclude that the respondent's value should not be altered for the following reasons:
1. Adequate allowance has been made for the influence of the school and, in particular, the adjoining "Pender House".
2. Basic sales of larger vacant residential sales generally support the applied figure.
3. Correct relativity with figures applied to nearby lots is established.
4. The respondent, for reasons explained earlier, was the only party to produce expert valuation evidence to support his figure.
5. The presumption of correctness attached to the respondent's valuation (under s.33 of the Valuation of Land Act 1944) has not been disturbed.
6. Despite the ground 3 in the appellants appeal grounds, no argument was adduced as to why the Valuation of Land Act 1944 had not been properly applied. Indeed, in my view, the approach of the respondent conforms with the traditional approach to valuation of unimproved property – use of analysed sales supported by relativity with nearby comparative blocks.
Order
The appeals are dismissed.
BR O'CONNOR
JUDICIAL REGISTRAR
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