Melit v Department of Natural Resources, Mines and Energy
[2004] QLC 26
•2 April 2004
LAND COURT OF QUEENSLAND
CITATION: Melit v Department of Natural Resources, Mines and Energy [2004] QLC 0026 PARTIES: Trevor P and Marlene C Melit
(applicants)v. Chief Executive, Department of Natural Resources, Mines and Energy
(respondent)FILE NO:
AV2003/0561
DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 2 April 2004 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER Dr NG Divett ORDER: The appeal is dismissed, and the unimproved value of Lot 4 on RP 72489 as determined by the Chief Executive in the sum of Two Hundred and Twenty-Seven Thousand, Five Hundred Dollars ($227,500) is affirmed. CATCHWORDS: Valuation – Use of sales – Comparable Sales APPEARANCES: Mrs BA Gorman for appellants
Mr R Paterson for the respondent
Background:
This matter relates to land at 40 Gardner Street, Nundah and described as Lot 4 on RP 72489, Parish of Toombul. The subject land has an area of 713 m² and is located about 7.5 kilometres radially north-east of the Brisbane GPO, and in a predominantly residential area. Access to Gardner Street is good, and Gardner Street is bitumen sealed with concrete kerbing and channelling. All normal urban utility services are available, and the subject land is zoned Low Medium Residential under the Brisbane City Plan 2000 of 30 October 2000, and effective at the date of valuation at 1 October 2002. The key issues are the nature of the land, changes in the value and comparison of sales.
On 24 February 2003 the Chief Executive issued a valuation of the subject land at $227,500. Following an objection the Chief Executive confirmed that figure on 22 July 2003. The appellants have now appealed claiming the unimproved value should more properly be $130,000. Because the property had formerly been the subject of a preliminary conference and a full hearing before the Court for the preceding valuation of 1 October 2001, there was no further preliminary conference for the current matter, which then went to hearing on 13 November 2003.
Mrs BA Gorman of Gorman Lawyers appeared for the appellants, calling evidence from Trevor P Melit. Mr R Paterson, Principal Legal Officer appeared for the respondent, calling evidence from Andrew Trevor Brown, the departmental registered valuer responsible for determining the valuation. At the request of the parties a joint inspection of the property was undertaken.
The Nature of the Land –
Details of the nature of the subject land were revisited, and were generally in accordance with that described in the previous decision of this Court in the matter of TP and MC Melit v Chief Executive, Department of Natural Resources and Mines (AV2002/0169) 6 February 2003, unreported. While I will not repeat those findings it is worth repeating that Mr Melit continues to question Mr Brown’s description of the subject land as having a moderate fall. It is his concern that such a description of the topography of the land has led to Mr Brown’s over-estimation of the value of the parcel.
Mr Brown does not retreat from his understanding of the nature of the subject land, which he argues is fully understood as the result of previous inspections over a number of years. Mr Brown notes that even in 1998 the valuer at that time had made a further reduction in the valuation at that time of an additional $4,000 in order to adequately provide for any uncertainties inherent as a consequence of the fall of the land, erosion of the cliff face fronting the adjoining bushland, and drainage problems. Mr Brown notes that original reduction of $4,000 in 1998 now equates to $17,500 at the relevant date, and those disabilities are included in his valuation at the current date of $227,500. He agrees that without those disabilities the subject land would have an unimproved value of about $245,000.
In explaining his description of the subject land as falling “moderately”, Mr Brown explains that the general description used for sloping land is defined as a “general slope” (up to 5 degrees of slope), “moderate slope” (steeper than 5 degrees), and when the terrain necessitates the use of considerable building constraints, then the land is referred to as “steeply sloping”. However he argues that the actual slope of the land was clearly known from the accompanying contour plan. (Exhibit 3).
The presence and condition of the grass public pedestrian pathway extending along the north-eastern boundary of the subject land, is similar to that discussed in the previous decision. Mr Melit confirms that he personally continues to maintain that pathway area, and agrees that while there may be some intrusion into his privacy by students and youths visiting the Toombul area, he is not subject to disruptive behaviour associated with the use of the pathway. Its relative low level of use is apparently the result of a general lack of knowledge of its existence by the public. Mr Brown acknowledges that both advantages and disadvantages are associated with the pathway, but on balance he sees it as an advantage, particularly in providing more direct access to Toombul Railway Station.
The description of the adjoining bushland, and the parkland beyond, is similar to that discussed in the previous decision, and I will not repeat those findings. However both parties agree that the outlook from the subject land to the adjoining Kedron Brook areas is pleasant, and provides a good level of privacy. There was no further evidence about access to the bushland via the rough steps leading down from the cliff edge on the subject land. Suffice to say that the general unkempt nature of those rough steps makes access to the bushland difficult for Mr Melit.
While access from the end of the cul-de-sac pavement in Gardner Street to the subject land is good, because of the sloping nature of the subject land, the concrete vehicle driveway on the subject land itself is steep. Mr Melit’s enquiries of the Brisbane City Council’s engineers to modify the drainage water discharge across the subject land remains unfulfilled at the date of valuation, and surface waters continue to pass across the north-western end of the subject land during heavy rainfalls. Mr Brown has allowed for that in his valuation, and has taken into account the previous decision of this Court. I accept that advice.
Changes in the Valuation –
Mr Brown confirms that broad sales evidence in that area near Kedron Brook has continued to rise about 75% over the previous 12 months period to 1 October 2002. He advises that he had applied that 75% increase to all valuations in that locality, while maintaining the previous relativities between parcels. The subject land has been increased from $130,000 to $227,500 (75%).
Mrs Gorman notes that a copy of a departmental SmartMap would appear to indicate that a different rate increase had been applied to the two small parcels of Sale 4 (Lots 45 and 46) at 33 Carew Street. However Mr Brown explains the correct interpretation of those unimproved values. He further advises that previously that parcel had been valued on a different basis as a multi-residential parcel, rather than as a single residential parcel under s.17 of the Act as it now is valued. Mr Brown explains that in the previous valuation there had been a valuation as a multi-residential site at $210,000.
Mr Brown advises further had Lots 45 and 46 been valued as a single residence site at 1 October 2001, its unimproved value would have been about $202,500 to $205,000. That parcel was subsequently manually adjusted in the current valuation of 1 October 2002, in recognition of the new purchaser’s advice to Mr Brown that the sale was purchased for development as a single residence site. Mr Brown notes that is consistent with surrounding single residence sites of between 800 m² to 1,200 m². Mr Brown further advises that smaller parcels had been increased at 1 October 2001 because of market evidence; while the rise in October 2002 for the larger parcels was then supported by market trends.
Comparison of Sales –
Mr Melit was unfamiliar with Mr Brown’s sales, and provides no alternative sales to support his estimate of the unimproved value of the subject land. Mr Brown provides the following comparable sales:
· Sale 1 – (36 Aland Terrace, Wavell Heights – Lot 1 on SP 149722). This is a 479 m² vacant parcel located about 1.5 kilometres north-west of the subject land, and about 9 kilometres north of the CBD. The sale is near level and is therefore superior to the subject land, but is seen overall as inferior due to its smaller size, distance from the CBD and further distance from rail transport. However Mr Brown later concedes that it is closer to public bus transport along Hamilton Road. The sale sold in June 2002 for $235,000, was analysed at $227,500, and applied at $212,500.
· Sale 2 – (21 Brae Street, Wavell Heights – Lot 11 on SP 152978). This is a 512 m² vacant parcel located about 1.3 kilometres west of the subject land, and about 1 kilometre further north of the CBD. The sale is further removed from rail transport, although a public bus stop is only 10 metres from the sale. While bus movements could intrude upon privacy at the sale, the increased convenience of the bus stop would balance that impact in my opinion. The sale is near regular in shape, and is therefore superior from that perspective. However the sale is seen as inferior in size and location, and also its less accessibility to rail transport. The sale sold in September 2002 for $217,500, was analysed at $212,500, and applied at $192,500.
· Sale 3 – (45 Colin Street, Nundah – Lot 122 on RP 34031). This is a 405 m² improved parcel located about 300 metres east of the subject land, and about 250 metres from the Toombul Railway Station. The sale is an inferior location and is surrounded by multi-residential developments. The sale has a narrower frontage and suffers from parking problems in the street due to proximity to the railway station, and the units nearby. The sale has a superior shape, but because of its smaller size, and location in a busy less desirable location, overall is seen as inferior. The sale sold in September 2002 for $253,000, and allowing for 120 m² dwelling, and other improvements, was analysed at $173,200, and applied at $157,500.
· Sale 4 – (33 Carew Street, Nundah – Lots 45 and 46 on RP 34695). This is a 1,341 m² vacant parcel located about 200 metres north of the subject land. The sale is about twice the size of the subject land, but is about 200 metres further removed from the Toombul Railway Station. The sale is a near level rectangular site, and is seen overall as superior due to size, slope and shape of the land. The sale sold in February 2002 for $450,000, was analysed at $442,500, and applied at $400,000.
Mr Brown agrees that he has tended to place greater emphasis upon access to rail public transport, as he argues that the level of values in close proximity to railway stations, even accepting some disturbance from rail noise, indicates quite high property values. However he agrees that Hamilton Road has bus services provided direct access to Chermside regional shopping centre. He argues that his valuation has made allowance for all of those factors, and access to public transport, in his comparisons with the sales. He also argues that the subject land has better privacy than his Sale 4 (33 Carew Street). He also notes that there is a public bus route passing near to the subject land.
Decision:
In considering this matter I note that the guiding principles were clarified in the previous decision of 6 February 2003, and I will not repeat those clarifications. Clearly it is the responsibility of the appellant to demonstrate why s.33 of the Act should not apply in this instance. Section 33 directs that the unimproved value as determined by the Chief Executive is deemed to be correct, unless proved otherwise, or unless the valuer has made an error or used a wrong principle in his valuation. That has not occurred.
In selecting sales of comparable vacant lands, Mr Brown has followed precedent established by the court at all levels. That was clarified in NR and PG Tow v Valuer-General (1978) 5 QLCR 378, where the Land Appeal Court said at 381:
“Courts of the highest authority have laid down that the best test of value is to be found in the sales of comparable properties, preferably unimproved, on the open market round about the relevant date of valuation and between prudent and willing, but not overanxious parties.”
That was later followed in WM and TJ Fischer v Valuer-General (1983) 9 QLCR 44, where the Land Appeal Court said at 46:
“It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels.”
And again followed in R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13, where the Land Appeal Court said at 17:
“The Valuer General in this case has used the sales of unimproved or lightly improved properties as a valuation basis and it is clear that he has not erred in principles in valuing the subject land on the basis of such sales analysis. Nor has it been shown that the Valuer-General made any serious error of fact.”
In adopting an improved sale at 45 Collin Street (Sale 3), Mr Brown has sought to demonstrate that the market for improved and developed properties is in line with the market for vacant lands. He advises that the applied unimproved value of Sale 3 at $157,500 was determined by comparisons with sales of vacant lands, and the added value of the improvements was then used as a check against the reliability of that analysed sale. On the comparisons provided I find those four sales are suitable comparatives.
Comparison of Sales -
The relevant comparisons may then be summarised.
SaleArea Applied Value Comparison
1479 m² $212,500 Inferior, but closer to bus
transport
2512 m² $192,500 Inferior
3405 m² $157,500 Inferior
41,341 m $400,000 Superior
Subject land713 m² $227,500 -
In seeking some measure of the comparative comparisons, I am reminded that residential house sites are purchased on a “site” basis, and not on any rate per square metre basis. That was demonstrated in DF and M Ward v Valuer-General (1983) 9 QLCR 48, where the Land Appeal Court said at 50:
“Relativity with different land use market categories is not tenable. Such cross-reference of values is not a valid valuation exercise or in conformity with the cardinal principles of valuation which calls for comparisons of like with like in all relevant points of comparison including highest and best use. Sites are valued overall and not on a rate per hectare basis. The experience of the market place reflects the former not the latter practice.”
The importance of “site” comparisons was also emphasised in Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327, where the Land Appeal Court said at 330:
“The appellants fail on this point because the appropriate basis for the valuation of a residential lot is not the application of a rate per square metre but an assessment of the unimproved value of each lot as land used for single unit residential purposes. As the Land Appeal Court said in its decision on the appellants’ previous appeal (H and E Grahn v. The Valuer-General, AV89-246 and 247, 13 December 1990):
‘for the purpose of valuing residential sites, the preferable method of comparison is on a site to site basis and not on the basis of a unit area valued comparison. Site for site comparison should take into comparison such matters as the size of the lots, the situation of and access to the lots, the shape and topography of the lots etc. and comparisons on a unit area basis do not necessarily reflect valuation considerations for the above features.’”
In the current matter Mr Brown has demonstrated that he was aware of the specific advantages and disadvantages of the subject land, including its privacy and views afforded by the adjoining bushland area, and he has allowed for those attributes. Clearly the subject land as a site at $245,000, without its agreed disabilities, does not reflect any pro rata basis based upon area comparisons with Sale 4 at 1,341 m². The allowance of $17,500, as an updating of the relative disabilities agreed by the previous valuer in 1998, demonstrates that Mr Brown has continued that discretion in the appellant’s favour. I see no reason to alter that relativity, which Mr Brown advises has been continued in the current revaluation. I see no error of fact or principle in those comparisons.
Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellants have proved their case. The appeal is dismissed, and the unimproved value of Lot 4 on RP 72489 as determined by the Chief Executive in the sum of Two Hundred and Twenty-Seven Thousand, Five Hundred Dollars ($227,500) is affirmed.
NG DIVETT
MEMBER OF THE LAND COURT
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