McGruer v Chief Executive, Department of Natural Resources
[1997] QLC 54
•24 April 1997
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LAND COURT
BRISBANE
24 April 1997
Re: Appeal against Annual Valuation
Roll No . 13474 Local Government of Cooloola
(AV96-87)
WW and SA McGruer
v.
Chief Executive, Department of Natural Resources
(Heard in Gympie)
Introduction
The appellants, WW and SA McGruer, own land described as Lot 7 on RP807200 County of Lennox, Parish of Woonga (the “subject land”). In the annual valuation of the area as at 1 January 1996 the respondent assessed the unimproved value of the subject land to be $27,000. The appellants objected. Their objection was disallowed. They appealed to the Land Court, estimating that the unimproved value of the subject land was $18,000.
The notice of appeal contained 5 grounds, one of which was a complaint about the method employed by the respondent to inform landowners of the valuations of their land. The other grounds of appeal were:
Valuation of the property is based on sale price & not the unimproved value of land, the development & council charges are added to sale price, therefore a true and fair valuation cannot be struck.
The land is prone to flooding, this was known to Valuation department, although the council has no record of tributary flooding as they only keep records of the Mary River.
...
The huge increase from $18,000 to $27,000 for unimproved value is unjustified & a blatant rort by the Valuation Department.
The properties bordering the said property flood completely & approximately one third of our property goes under water. The bordering property remains unsold & is unkept & overgrown, therefore reducing the value of our property.”
Section 45 of the Valuation of Land Act 1944 provides that an appeal shall be limited to the grounds of appeal and the burden of proving any and every such ground shall be upon the owner.
The appellants were represented by Mr WW McGruer, who gave oral evidence about the subject land and neighbouring properties and who provided 2 photographs of flooding in the immediate vicinity of the subject land. Valuation evidence was given on behalf of the respondent by Mr BP Fuller, a valuer employed by the Department of Natural Resources.
It is appropriate to deal with the matters raised in the grounds of appeal in the following order:
(a) the features of the subject land and neighbouring properties (grounds 2 and 5);
(b) the sales evidence in relation to the value of the subject land (ground 1); and
(c) the increase in valuation (ground 4).
The subject land and neighbouring land
The subject land has an area of 6578 square metres and is situated in Fernvale Drive, about 9 kilometres by road south-west from the Gympie Post Office. Fernvale Drive is a full width bitumen carriageway with grass verges. Good access is available to the site, although access is subject to occasional local flooding. Telephone and power services are connected to the land. It is zoned “Rural B” and is too small to be subdivided. The land is improved with a dwelling occupied by the appellants.
The subject land comprises two tiers of level to easy sloping scrub and forest country. The first tier falls very gently away from Fernvale Drive and comprises a flood free homesite. The second tier falls gently to Pie Creek, which is a regulated stream. Riparian owners have access to the water for stock and domestic purposes. Approximately 50% of the land is subject to flooding. According to Mr McGruer, Pie Creek usually contains the extra water from local rainfall. Sometimes its banks are breached, especially after heavy storms. Water levels can rise and fall quickly, but part of the land can be inundated for between 24 and 48 hours. At such times access to the land is cut. The worst instance of flooding in his experience was in 1992 when there was flooding twice within one week. Mr McGruer’s evidence did not suggest, however, that such flooding is a regular or longlasting occurrence.
Mr McGruer said that properties beside and opposite the subject land are also susceptible to complete or partial flooding. He provided a photograph of flooding at the Chapman Bridge crossing of Pie Creek and a photograph of flooding of the property opposite to the west (Exhibits 2A and 2B). Apparently a culvert pipe nearby is too small to carry the volume of water at such times and waters flow across the subject land.
Mr McGruer also noted that neighbouring Lot 6 is overgrown and, in his opinion, detracts from the amenity of the subject land.
There was no significant dispute between the parties about the features of the subject land and neighbouring blocks. The real issue was how the subject land should be valued.
Sales evidence
The Valuation of Land Act 1944 defines “unimproved value” of land to mean, 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 at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist” (section 3(1)).
Such a valuation is made having regard to the condition of surrounding properties (whether improved or not) and the nature of services available to the subject land (such as access by road and the availability of telephone and electricity to the land), at the relevant date of valuation.
Section 33 of the Act states:“Any and every valuation, or alteration of the valuation of any land made ... under the Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.”
That section creates a presumption that the value in money terms shown by the respondent in his notice of valuation is correct. The decision of the High Court of Australia in Brisbane City Council v Valuer-General ((1978) 140 CLR 41 at 56) is authority for the proposition that, once it is shown that:
(a)in making the valuation the respondent acted upon a wrong principle, or made a serious error of fact; or
(b)the valuation was made by a method fundamentally erroneous,
the presumption created by section 33 is rebutted.
As has often been noted, the best basis for the assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land. In his valuation report (Exhibit 3) Mr Fuller referred to three sales of land in the locality by reference to which the subject land had been valued.
The subject land was valued as a rural residential homesite. The three sales were of comparably sized, “Rural B” zoned blocks, each of which was located some kilometres away from the subject land.
Sale 1 comprises 9999 square metres of easy sloping, fully cleared forest land about 4 kilometres south-west of the subject land. Bitumen access and power and telephone services are available to the land. It was considered overall superior to the subject land due to its larger area and superior aspect. In Mr Fuller’s opinion, however, the subject enjoys the advantage of a creek frontage. The land was sold in November 1995 for $42,000. When allowance was made for a dam, clearing and fencing the analysed value was $38,500, and the applied value was $38,000.
Sale 2 is a 1 hectare block of land also located about 4 kilometres south-west of the subject land. It is a fully cleared forest allotment sloping gently down to a gully which runs along the rear or western boundary. Bitumen access and power and telephone services are available to the site. The land was considered overall superior due to the larger area and superior aspect. Again, Mr Fuller described the subject land as having the advantage of a creek frontage. The land was sold in September 1995 for $39,500. After an allowance was made for clearing, the analysed and applied value was $38,500.
Sale 3 is slightly smaller block than the subject, having an area of 5837 square metres. It is located about 10 kilometres north-west of the subject land and comprises an elevated triangular shaped allotment that falls easily away from the road before dipping away steeply to the south-west. A good housesite is available near the road or north-eastern boundary. Good views are available to the west and south-west. Mr Fuller described the sale and the subject blocks as similar overall. The sale is considered slightly inferior to the subject land in terms of size and similar in terms of access and distance from Gympie. The sale land is serviced by a reticulated bore water scheme while the subject land fronts Pie Creek from which water for domestic and stock purposes is available. Mr Fuller considered that the advantage of the superior views is balanced by the subject land’s creek frontage. The land was sold in September 1994 for $29,500. Allowing for some clearing, the analysed value was $29,000 and the applied value was $27,000.
Speaking more generally, Mr Fuller said that in the market a premium is paid for creek frontage land with a regulated stream, good water and a flood free homesite. Sales 1 and 2 were both superior to the subject and their values relative to the value of the subject were correct. Although the sale 3 land had different land types it was similar in value to the subject.
Mr McGruer was not familiar with the sale blocks. He was willing to describe sales 1 and 2 land as “100% better” than the subject because of their higher elevation, compared with the lower and flood prone subject. He sees the creek frontage to the subject land as a nuisance, at least when the banks of the creek are broken in times of flood. As noted earlier, significant flooding occurs but the evidence did not demonstrate that flooding is a regular or longlasting occurrence. Mr Fuller said that, when valuing the subject land, he took into account its susceptibility to flooding.
I am satisfied that the sales evidence supports the respondent’s valuation of the subject land. The appellants have not shown that in making the valuation the respondent acted upon a wrong principle or made a serious error of fact. Nor have they demonstrated that the valuation was made by a method fundamentally erroneous. Those findings are sufficient to dispose of the appeal. It is appropriate, however, to deal with the fourth ground of appeal.
Change in value
The appellants objected to the “huge increase” in the valuation of the land from $18,000 to $27,000. Mr McGruer stated that the $18,000 figure nominated by the appellants as the unimproved value of the subject land was used because that (or $17,000) was the valuation of the land when they purchased it five years previously. They had, however paid $27,000 for it.
Mr Fuller explained that the unimproved value of the land was assessed as $18,000 as at 31 March 1992 but had increased to $27,000 as at 30 June 1993. The increased valuation was effective, for rating purposes from 30 June 1994. It had remained unchanged in annual valuations to and including the valuations as at 1 January 1996.
Mr Fuller did not make the valuation of the subject land when the increase occurred but had been the valuer responsible for valuing the land as at 1 January 1995 and 1 January 1996. He had looked at previous valuations and noted that there had been an increase in development in Cooloola Shire. The market had increased in the early 1990s and had levelled off in the past two years. There has been an oversupply of rural homesites and fewer sales, and that situation is reflected in the absence of an increase in valuations.
Ground 4 of the appeal fails.
Order
The appeal is dismissed and the valuation of the Chief Executive in the amount of $27,000 is affirmed.
GJ NEATE
MEMBER
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