Miller v Chief Executive, Department of Natural Resources and Mines
[2001] QLC 67
•18 July 2001
LAND COURT BRISBANE 18 July 2001
[2001] QLC 67
Re:Appeal against Annual Valuation Valuation of Land Act 1944 Property ID No: 1270215 Local Government: BCC - Moggill (AV00-283)
John F and Margaret M Miller v.
Chief Executive, Department of Natural Resources and Mines
D E C I S I O N
Background:
This matter relates to land at 16 Farnworth Street, Chapel Hill, and described as Lot 117 on RP 201795. The subject land has an area of 685 m2 is located about 5.5 kilometres by road north-east of the Kenmore Post Office. Farnworth Street is bitumen sealed with concrete kerbing and channelling, and access is easy to the subject land from Farnworth Street. All normal utility services are available, and the land is zoned Residential A under the Town Plan of the Brisbane City Council current
at the effective date of valuation of 1 October 1999. The key issues are relativity and comparison of sales.
The subject land is at road level at its frontage to Farnworth Street, falling gently to moderately from north-east to south-west. The site is well drained, is at medium elevation, and is currently used for the purpose of a single residential dwelling.
On 27 March 2000, the Chief Executive issued a valuation of the subject land at $110,000. Following an objection the Chief Executive confirmed that figure on 27 June 2000. The appellants have now appealed claiming the unimproved value should more properly be $85,000. John F Miller appeared and gave evidence for the appellants. Uday Singh, the departmental registered valuer responsible for determining the valuation appeared and gave evidence for the respondent.
The Evidence:
Relativity -
The key issue in this matter is relativity between the subject land and other parcels in the general area. There is agreement about the physical nature of the land
and its proximity to services. The land is about 70 metres from Mount Coot-tha Forest parklands. Mr Miller argues however that former relativities between Farnworth Street and other areas have now changed over time.
Mr Miller notes that about 10 years previously, when the appellants acquired their dwelling, many surrounding areas were representative of similar overall prices of homes as the appellant’s house and land package. Because of succeeding changes in the unimproved value in the subject land over the last 10 years, at times when some surrounding parcels had exhibited no increase in land values, the former relativities for land have now been distorted. During this period Mr Miller argues that overall the relative price for improved house/land packages has not varied. As a result of such distortions, Mr Miller argues that the residual added value of the dwellings in Farnworth Street must be seen to have declined compared to dwellings in surrounding areas. Mr Miller argues that such changes have unfairly distorted the liability for rating purposes on the subject land.
To demonstrate his argument Mr Miller notes that the subject land was increased at the current valuation at 1 October 1999 from $94,000 to $110,000, a rise of 17 percent. Mr Miller refers to several streets in Chapel Hill and adjoining suburbs where there had been no increases at all during that same revaluation period. Mr Singh is aware that each of those adjoining streets had not been changed, arguing that market evidence in those localities supported no change for those areas.
Mr Miller agrees that a neighbouring vacant parcel at 20 Farnworth Street, (Lot 115) had sold for $110,000 during the relevant period, but he argues that parcel had then been revalued at $105,000, while the subject land had been revalued in line with the full sale price of 20 Farnworth Street at $110,000. However Mr Miller concedes that 20 Farnworth Street is lower in elevation and is marginally inferior to the subject land. Mr Miller also notes that a parcel across Farnworth Street at 17 Farnworth Street (Lot 196) had been reduced on objection from $120,000 to
$115,000, during the same period. That parcel had an area of 748 m2.
It is Mr Miller’s argument that relative unimproved land values must be fair and reasonable if owners are to be responsible for a fair appropriate revenue contribution to public services. As a check on relativities Mr Miller searched the respondent’s data to determine appropriate levels of land value in the area. However the evidence indicates that the unimproved values obtained by Mr Miller when he searched the respondent’s public display records in March 2001, were likely to reflect
the unimproved values of those parcels at 1 October 2000, the succeeding year to the current matter for consideration.
Now while the actual unimproved values compared by Mr Miller may represent a later assessment of land values than the 1 October 1999 valuation, the issue that Mr Miller addresses is really the disparity that would appear to exist in places between the actual sale price paid for a parcel and the unimproved value applied by the respondent. Mr Miller argues that such variations provide little confidence in the method of application of the sale’s evidence, and whether any errors had occurred in the valuations.
To demonstrate his argument Mr Miller notes the following examples of vacant land sales:
| Sale | Date | Price | Applied value at 1 October 2000 |
| 18 Grevillea Place | 28/3/2000 | $190,000 | $110,000 |
| 25 Camborne Place | 16/6/1999 | $152,000 | $110,000 |
| 48 Merindi Street | 29/1/2000 | $145,000 | $106,000 |
Mr Singh is aware of those sales but argues that departmental records indicate that Mr Miller may have inadvertently transcribe unimproved values of those parcels relative to the former valuations at 1 October 1999. Mr Singh for example notes that the unimproved value of 25 Camborne Place (Lot 398) at 1 October 2000 was in fact now $140,000, and not $110,000 as suggested Mr Miller. Mr Singh argues that 25 Camborne Place had an unimproved value of $111,000 at 9 February 2000. Mr Singh also argues that the notice of sale of 25 Camborne Place in June 1999 may not have been lodged with the respondent in time for its consideration in the valuation at 1 October 1999. Mr Singh notes that delays in receiving notices of sales are fairly common, and the respondent is thus unaware of those sales when it completes its valuations. In such cases the sale is usually then assessed in the following valuation period. Sales evidence is lodged with the Chief Executive under s. 82 of the Act, and penalties for failing to lodge notices are provided for in s. 89.
Mr Miller concedes that former relativities can change over time, but he argues that there has to be a reason for any changes. Mr Miller notes that parcels nearby to the subject land have now relatively less values than the subject land, while receiving the same services and demonstrating similar house/land prices. On that basis Mr Miller argues that Farnworth Street has been unfairly valued over some years now.
In respect of recent changes in relativity for parcels in adjoining Greenford Street, Mr Singh agrees that he had sought to readjust some parcels in Greenford Street in order to better reflect stormwater problems in that area. Greenford Street had originally included a major depression, and some parcels have now been reduced in order to reflect that disability.
Mr Miller also notes that land values in Goolman Street to the south of Farnworth Street, were not increased at 1 October 1999. Mr Singh explains that the reason for no changes in Goolman Street was to reflect the current noise problems from traffic and buses in Goolman Street, which has become a major thoroughfare for traffic movements through Chapel Hill. Mr Singh advises that streets off Goolman Street were increased in value where the traffic noise was not seen to be such an impediment.
Mr Miller further points to apparent inconsistencies between parcels in Greenford Street at about $80,000 to $90,000, while lands just around the corner in Fimbriata Close have applied unimproved values at $153,000. Mr Singh argues those differences reflect the level of the market in Fimbriata Close, and the topography of lots in Greenford Street, plus the heavy traffic and bus route along Greenford Street.
In seeking to explain how he applied the evidence of the market place to the unimproved land, Mr Singh explains that he initially assesses all sales of vacant lands in the locality. In then seeking to balance relativities across the area, Mr Singh seeks to make a conservative application of each sale, before applying that to the subject land. That application seeks to determine a medium type of market level for an overall submarket sector.
Comparison of sales -
Mr Miller provides a schedule of sales of vacant lands in the area (Exhibit 4). However he does not specifically analyse those sales, merely noting the wide differences between the sale prices and the unimproved value subsequently applied at 1 October 2000. Mr Miller further argues that where a sale is the last vacant land in the street, then, in Mr Miller’s opinion, the scarcity was likely to result in a high price for that land, with a resulting special value attached to that last vacant parcel. However Mr Miller generally agrees that sales of vacant lands, where they are available, provide the best means of determining unimproved land values.
To support his valuation Mr Singh provides the following sales of vacant Residential A land:
· Sale 1 – (20 Farnworth Street - Lot 115 on RP 201795). This is a 670 m2 lot, two removed to the west of the subject land, about 5 metres lower in elevation and with all similar services, and a similar crossfall. The sale had a small depression across it prior to development. Overall the sale is marginally inferior to the subject land.
The sale sold in June 1999 for $110,000, was analysed at $109,250 and has been applied at $105,000 (96 percent).
· Sale 2 – (21 Lamborne Street - Lot 43 on RP 195893). This is a 702 m2 lot located about 260 metres radially south of the subject land. The sale has a moderate fall from north-west to south-east, and contained a depression that needed filling during construction in order to create a good building site. Overall the sale is superior to the subject land.
The sale sold in October 1999 for $127,000 and was analysed at $116,250.
· Sale 3 – (2 Fimbriata Close - Lot 6 on SP 105856). This is a 860 m2 parcel located about 500 metres radially south of the subject land. The sale is in a cul-de-sac, with easy access to Fimbriata Close, at medium elevation, with a limited outlook towards the south-east. The sale has a rock retaining wall on the road alignment in order to maintain a building site. Overall the sale is seen as superior to the subject land.
The sale sold in January 1998 for $160,000, which was analysed at $153,250.
However when seeking to determine the value of the subject land in the current matter, I am directed by s. 3(1) of the Valuation of Land Act 1944 which relevantly directs:
“3(1) For the purposes of this Act -
“Unimproved value” of land means –
(b)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 as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.”
I must therefore place myself in the position of a prudent purchaser or vendor seeking to value the land at 1 October 1999. The definition of value of the subject land in such circumstances is best described by the wording of the High Court of Australia in Spencer v. Commonwealth of Australia (1907) 5 CLR 418, where Griffiths CJ said at page 432:
“In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained on a given day, i.e. whether there was in fact on that day a willing buyer, but by inquiring “what would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?” it is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.”
The question then to be asked is what value would the prudent purchaser offer to purchase the subject land if it was vacant as required under S. 3(1)(b), in the full knowledge of the then current market for vacant lands in Chapel Hill. The evidence of Sale 1 at $110,000 would be a significant influence in that determination.
Decision:
Relativities -
I turn first to the matter of relativity, and note that changes have occurred in relativities in the area over recent years. It is true that relativities do change over time as noted in R and MM Barnwell v. The Valuer-General (1990-91) 13 QLCR 13 where the Land Appeal Court said at page 17:
“It has been well recognised over the years that previously established relativity in unimproved values can and does change from valuation to valuation. If there was no justification for a change in relativity, the valuer’s task would be very simple in that all that would be required to establish value would be accomplished by the use of an adjusting formula. This, of course, is undesirable.”
The matter of reliable relativity is important when establishing unimproved values, as noted also in Barnwell at page 16:
“We are conscious that it is desirable that valuations made for the purposes of the Valuation of Land Act of comparable lands should bear proper relativity, one to the other, if the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis.”
That was also found in TF and SA Shepherdson v. The Valuer-General (1992- 93) 14 QLCR 83, at 87.
I turn then to Mr Miller concern that the percentage change in the unimproved value of the subject land is inconsistent with changes in the value of improved
properties in the area. While Mr Miller provides no estimate of the added value of the dwellings in that locality, it is his conclusion that there is a direct correlation between the sale of improved parcels and the sale of vacant lands. However if I consider sales and resales of vacant lands as demonstrated in Exhibit 4, I find:
| Parcel | Sale | Date | Resale | Date | Increase | ||
| 44 Street | Merindi | $118,000 | 28/5/99 | $126,000 | 3/2/00 | $8,000 percent) | (7 |
| 48 Street | Merindi | $125,000 | 1/6/99 | $145,000 | 29/1/00 | $20,000 percent) | (16 |
Those increases would suggest that the market for vacant lands had in fact increased in the relevant period in that area. The appellants have not discharged that responsibility.
The matter then to be addressed is whether Mr Singh has correctly applied the evidence to support the level of unimproved value applied to the subject land. The key to that lies in his comparison with sales of vacant lands in the area.
Comparison of sales -
In adopting comparisons with sales of vacant or lightly improved lands, I note that Mr Singh has followed precedents established by the Courts. I note for instance in WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44, the Land Appeal Court said at page 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 likely improved parcels. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence.”
The use of sales of vacant lands was also followed by the Land Appeal Court in PH Clough v. The Valuer-General (1981-82) 8 QLCR 70 at 76.
If I then consider Mr Singh’s sales, I find the key sale is his Sale 1. It is agreed by Mr Miller that the subject land is slightly superior to Sale 1, which has been applied at $105,000. On that comparison there is nothing to discredit Mr Singh’s valuation of the subject land at $110,000.
If I then compare Mr Singh’s Sales 2 and 3, they are both superior to the subject land. I believe if the subject land is then considered in isolation of the
surrounding parcels, then Mr Miller would agree with the valuation determined by Mr Singh. It is only the matter of apparent inconsistency in relativities that is of concern to Mr Miller.
Summary:
In considering the suggested inconsistencies in relativities noted by Mr Miller, I note that the onus to prove his case rests upon the appellant under s. 45(4) of the Valuation of Land Act 1944. I note that also in accordance with s. 33 of the Act unless it has been demonstrated to be in error, then the valuation as determined by the Chief Executive is to stand. (Brisbane City Council v. The Valuer-General (1977-78) 140 CLR 41 at 56 per Gibbs J.
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 as determined by the Chief Executive for Lot 117 on RP 201795 in the sum of
$110,000 is affirmed.
NG DIVETT MEMBER OF THE LAND COURT
0