Moon v Department of Natural Resources and Mines
[2005] QLC 35
•29 June 2005
LAND COURT OF QUEENSLAND
CITATION: Moon v Department of Natural Resources and Mines [2005] QLC 0035 PARTIES: Bruce Moon
(applicant)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO.: AV2003/0349 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under Valuation of Land Act 1944 DELIVERED ON: 29 June 2005 DELIVERED AT: Brisbane HEARD AT: Coolangatta MEMBER Dr NG Divett ORDER: The appeal is dismissed, and the unimproved value as determined by the Chief Executive in the sum of One Hundred and Thirty Thousand Dollars ($130,000) is affirmed. CATCHWORDS: Evidence – expert evidence – nature of evidence – role of a valuer explained [68] and [71]
Valuation – sales evidence – comparable sales – Valuation of Land Act 1944 [67]
Valuation – factors in valuation – restrictions on use – vegetation management – planning implications – duty of care of Council [52].APPEARANCES: Dr B Moon appeared on his own behalf
Mr A Cradick, Principal Legal Officer appeared for the respondent
Background:
This matter relates to land at 18 Carlisle Drive, Currumbin, and described as Lot 110 on RP 90577, Parish of Tallebudgera. The subject land has an area of 559 square metres, and is located on Currumbin Hill, to the west of the Pacific Highway, and about 1 km. by road to the nearest surfing beach at Tugun. Carlisle Drive is a two-lane bitumen sealed carriageway with concrete kerbing and channelling. All normal urban utility services are available. The subject land is designated as Detached Dwelling under the Gold Coast City New Town Plan of 6 June 2003, effective at the relevant date of 1 October 2002. The key issues are the nature of the land, disabilities of the land, planning implications, method of valuation and comparison of sales.
On 24 February 2003 the Chief Executive issued a valuation of the subject land at $126,000. Following an objection the Chief Executive confirmed that figure on 10 June 2003. The appellant has now appealed claiming that the unimproved value should more properly be $111, 000. At the hearing on 2 February 2005 the valuer for the respondent provided evidence for a higher unimproved value of $130,000.
Dr Bruce Moon, a professional land use planner, appeared and gave evidence on his own behalf. Mr A Cradick, Principal Legal Officer appeared for the respondent, calling evidence from Helena Wilson, the departmental registered valuer now accepting responsibility for the valuation, which was previously undertaken by another valuer no longer available to defend the valuation.
History of the valuation -
Dr Moon explains that the subject land had been previously valued by the respondent at 1 October 2001 at $74,000. He argues that when he first objected against the new valuation of $126,000 for 1 October 2002, he then had confidential without prejudice discussions with the previous valuer (Mr Crowley), who indicated certain sales evidence that had then been used to determine the unimproved value at $126,000. Subsequent to those discussions Dr Moon now finds that Miss Wilson has used different sales evidence to conclude a new figure of $130,000. While Dr Moon does not seek to rely upon the previous "without prejudice" discussions with Mr Crowley, his concern is that the new approach now relies on different criteria and sales evidence removed from the subject area. Dr Moon questions why the respondent department should not be bound to the grounds of appeal, as is the appellant? Miss Wilson's response in respect of those previous sales is discussed later.
Nature of the land –
It is agreed that the subject land is a rectangular shape parcel, well elevated above Carlisle Drive, with a steep bank fronting Carlisle Drive, which will provide some difficulties for vehicle access. There is an existing graded earth access, which currently exceeds the maximum grade of 25% allowable by the Gold Coast City Council (the Council). That existing access is towards the northern side of the subject land. Council's advice to Dr Moon is that vehicular access along the southern boundary will not be approved, because of existing vegetation on the parcel as discussed later. Miss Wilson has allowed for that restriction in her valuation, reducing the unimproved value from $134,000 which was applied to all the adjoining similar parcels with existing dwellings. She now argues for $130,000 for the subject land to allow for its combined disabilities. The subject land was vacant at the relevant date.
Dr Moon argues that Carlisle Drive is subject to areas of unstable soils and potential landslip hazards, which he believes have apparently not been allowed for the in valuation. Dr Moon advises further that the Council has advised him that before any soil was removed from the subject land, he must first provide substantial geotechnical reinforcement mechanisms to assure that adjoining properties are not subject to any landslip problems. Dr Moon further argues that it is a disadvantage in not being able to provide a fresh vehicular access along the southern boundary in order to provide vehicular access directly under the new proposed dwelling. Location to the south side of the lot would maximise the impact of solar energy for the new dwelling. However he would then need to roof the garage separately to the rest of the dwelling. It is Dr Moon's preference to locate his garage under the dwelling.
Miss Wilson agrees that the Carlisle Drive area is shown on Council maps of unstable soils and potential landslip hazards (Exhibit 5), but notes that those maps are advisory by nature, and where problems may exist, then further geotechnical studies need to be made. She notes that Dr Moon has not provided such reports. It is noted that Carlisle Drive is shown as a moderate risk of instability area.
Dr Moon rejects that, as he advises that he did get geotechnical advice, which among others, advised that any retaining walls upon the site can only be to a maximum height of 1.5 m., before needing to be stepped back about 1 m. progressively. He notes that those extra constraints will add to the cost of the building, and should be reflected in the valuation of the land. Dr Moon notes that because of the slope of the parcel, a dwelling of 15 m. depth would result in site excavations to 3 m. deep at the rear. He argues that such extra costs would be a planning condition under the Integrated Planning Act 1997, (IPA), and Dr Moon provides copies of the Local Area Plan for Currumbin Hill (Exhibit 1 – M18 to 25), which details those requirements.
Dr Moon also argues that the Local Area Plan also establishes vegetation management restrictions (Code 36), which impacts the subject land. He provides a sketch plan of the site which provides site analysis for an application to the Council for a proposed use of a detached dwelling (Exhibit 7 – pp.5 and 8). That plan reveals the presence of mature vegetation to be retained, and the location of the new dwelling towards the rear of the parcel. Dr Moon advises that from that location the only views from the dwelling would be towards trees, and the ocean cannot be seen from the subject land (see Exhibit 7 – p.4).
Because of the design of his proposed dwelling, Dr Moon argues that it would not be possible to provide external stairs from the garage area below to the upper living area, as that would endanger existing vegetation (Exhibit 6 – p.2). To overcome that disability Dr Moon has needed to install a lift from the garage to the rooms above at an additional cost of $33,000. He argues that those costs are a direct result of the vegetation restrictions upon the land, which prevent trees near the side boundary, or 6 m. from the front boundary, from being removed. Miss Wilson agrees that the lift is not a usual fixture in the average dwelling, but argues that was a personal choice of the appellant, and was constrained by his personal design choice of the dwelling. Miss Wilson notes that the new dwelling will tend to be more significant than the older surrounding dwellings, probably suggesting Dr Moon's aspirations to capitalise on the value of the subject land.
In respect of the council's advice to Dr Moon that certain trees could not be removed, Miss Wilson is aware that such advice is likely to be given by the Council. She was also aware of legal precedents which influence a Court's responsibility to prevent dangerous trees from being removed, and she has made some allowance ($4,000) in her valuation to include that possible restriction on building activities. However she notes that the planning advice given was not that certain things could not occur, but more that a formal application needed to be made in order for careful considerations of each specific issue. Dr Moon notes that such decisions by Councils can be a problem for self-represented owners under IPA, as any subsequent court actions tend to bear significant costs. He argues in his opinion, that is part of current problems with IPA matters, and their legal solutions.
Dr Moon notes that because of the reducing size of new residential lots, mainly as a consequence of local governments desire to increase residential density, the scope for open space within lots is further restricted. Dr Moon argues further that in earlier times the maximum building footprint on a parcel was 50% of the area of the parcel. That has now been increased to allow larger new dwellings, which are in public demand and more attractive in the market place. However he notes that generally such large "McMansion" type dwellings, must be located on 700 square metres. He notes that the smaller areas (599 square metres) of the subject land precludes those more market demanded style homes, and therefore is less attractive in the market place compared to the larger parcels.
The local streetscape –
Dr Moon argues that in drawing comparisons with sales of properties in adjoining more affluent areas, Miss Wilson has tended to overplay the quality of the local streetscape in Carlisle Drive. Dr Moon argues that Carlisle Drive was developed soon after 1958, and many of those 1970s dwellings have not yet reached the "gentrification process" of major redevelopment. He concedes that some minor refurbishments have occurred in the street, but provides photographs to demonstrate that the locality is not yet showing signs of major reconstruction, as is occurring in other areas nearby. Dr Moon describes many of the houses as tired and aged, and advises that dwellings in the street are generally two to three bedrooms, with just general regular maintenance and repairs undertaken. However he agrees that a dwelling at 32 Winders Avenue at the corner of Yeramba Place, was refurbished. But he argues those few refurbishments do not reflect the general character of the area.
Miss Wilson disagrees with that synopsis, as she notes that there are various refurbishments in the area, although she agrees that total removal and replacement of houses is not yet occurring in the Carlisle Drive locality. Miss Wilson argues that total replacements have also not yet occurred in her sales evidence. Miss Wilson also notes that the subject land is close by to the private open space associated with the Currumbin Bird Sanctuary. It is agreed that while that land is not public open space, the public does have access to it. That area is known as Robinson Family Park, and the locality is also reasonably close to the beach front. However Miss Wilson argues that just because major refurbishments are not occurring just north or south of the subject land, does not mean that such activities are not occurring in that Currumbin area. She argues that as land prices increase, so the owners are seeking better quality houses on the parcel.
Miss Wilson also agrees that it is the quality of the locality which is the major influence upon value, rather than any general reference to a suburban location. On that basis she also agrees that the departmental use of Sub Market Areas (SMA) is more directed at locality influence, rather than any reference to postcode areas. She agrees that Tugun and Currumbin are both broken down into various SMAs for sales and valuation purposes.
Impact of planning –
Dr Moon argues that the subject land is in part controlled by the Local Area Plan for Currumbin Hill (LAP), which is defined by part 6, division 2, Chapter 11 of the New Town Plan (Exhibit 1, M 18). The LAP seeks to encourage high levels of vegetation and open space, and discourages visually intrusive buildings and high rise developments on Currumbin Hill. Any applications for development must be supported by a high level of detailed documentation relating to the design of buildings, and also protection of the natural environment. Special restrictions upon the clearing of vegetation in that LAP are enshrined in clause 6 of chapter 11, and provides control under specific development code 36 – vegetation management for all vegetation equal to or in access of 4 metres in height.
Dr Moon also provides evidence of the constraints codes of the LAP (part 7, division 3, chapter 16 – exhibit 1 M20), which he argues is applicable for any development procedure relevant to the subject land (clause 2.1 under the Integrated Planning Act 1997 (IPA)). Dr Moon notes that building works seen as "self assessable" are not to be undertaken on slopes exceeding 20%; and development on steep slopes which are seen as "impact assessable", must not detract from the landscape character, and if to be developed on lands which are seen as in areas of unstable soils or potential landslip hazards, must be accompanied by a stability report from a registered professional engineer with experience in slope stability matters. He notes also that driveways internal to a site are not to be steeper than 25%.
Dr Moon argues that all of the above constraints relate to the subject land. However he agrees that, subject to satisfying those constraints, a development may then proceed. Dr Moon agrees that the subject land is included in an area of moderate risk instability (Exhibit 5). Dr Moon also agrees that vegetation protection was previously controlled by the Council under Local Law 6 of the Gold Coast City Council, which has now been enshrined into the LAP. As a consequence, Dr Moon concedes that, subject to a reasonable excuse, except for areas within 3 metres of a side boundary and 6 metres from a front boundary, clearing for a dwelling on the remaining area is unlikely to be resisted by the Council as long as it does not affect the overall vegetation overlay for the area.
To demonstrate those planning impacts upon the subject land, Dr Moon provides a site analysis for the proposed dwelling to be constructed (Exhibit 7). Miss Wilson does not contest those disabilities, and as noted in paragraphs [5] and [11], she has provided an allowance of $4,000 for those impacts.
Impact of noise –
Another issue of concern to Dr Moon is the impact of overhead aircraft noise and its intrusion into the amenity of the subject area. Dr Moon is a community representative on the Airport Noise Abatement Consultative Committee. As a lay person with expertise in planning, he has acquired some understanding of the general process of noise abatement. He explains that the generally understood Noise Exposure Forecast mapping associated with aircraft operations, is an overview for planning purposes to predict likely noise levels and frequency associated with aircraft movements. As such he notes that the mapping is an indication of noise, rather than an accurate prediction of noise intrusion.
Dr Moon explains that exposure frequency mapping is based upon a computer model which predicts noise levels for landing and takeoff, for various aircraft types, and frequency of aircraft movements for both day time and night time operations. Dr Moon explains that those predictions can be expressed either as noise exposure forecasts (ANEF – Exhibit 1 N27), or obstacle limitation services (Exhibit 1 N26). The former show predicted decibel readings, and the latter depict obstacle limitation surfaces.
Accordingly, Dr Moon argues that the predicted levels of noise exposure can be ameliorated by local physical features, such as a quarry which can have the effect of providing some noise buffer over a selected area. He argues that is occurring in Tugun Heights in an area to the west of Tugun near some of the sales area in this matter, as explained later in paragraph [46]. Dr Moon argues that the incoming approach flight path directly over Currumbin Hill is the major noise problem for the subject land. On that approach pilots maintain higher elevations until just above Currumbin Hill, and then descend rapidly as they approach the airport. The effect of that more rapid descent, in his opinion, is that noise levels near the subject land tend to more intrusive than further south near Tugun.
While not providing any noise decibel readings, Dr Moon bases his opinion upon the greater number of public complaints about noise from Currumbin Hill residents, compared to those from Tugun Heights residents. However Dr Moon concedes that the difference in complaint levels might also reflect the attitude of residents of Currumbin Hill, who do not expect such noise intrusions, because they are further removed from the airport itself. Dr Moon also agrees that the appellants had purchased the subject land in 2001, in full understanding of the aircraft noise, which they had found to be acceptable to them.
Miss Wilson agrees that aircraft noise does intrude upon the subject land, but argues that from her personal experience of that noise, she believes that it is a common intrusion to parcels within the Currumbin and Tugun areas. As her sales evidence are located in that area, she sees the noise as a common denominator. Mr Cradick also notes that while Dr Moon may infer that such noise variations can occur over local areas such as Tugun Heights, there is no evidence to support that conclusion, and it is not the role of this Court to further investigate that matter.
The method of valuation -
While Dr Moon has no problem with the current mass appraisal system adopted by the respondent, he argues that the resulting unimproved value of the subject land is inconsistent with other approaches to the valuation process. To demonstrate his concerns, he provides evidence obtained from real estate agents, which purport to show capital growth for sales of improved parcels in Currumbin, of areas less than 650 square metres, over the previous decade. He argues that the percentage change in the median house price for the relevant period 2001 to 2002, demonstrates a 52.4% increase, compared to a 29.6% increase for the overall Gold Coast area. Dr Moon argues that as such data can be truly correlated with the respondent's sales data information, those statistics indicate a reliable source of information.
Dr Moon compares that percentage increase with the 70% increase applied to the subject land. Dr Moon understands that percentage increase also applies to all of the adjoining parcels in the Sub Market Area (SMA 48). He argues that the 70% increase for the subject land is clearly inconsistent with the market evidence, and he suggests that a true increase should be between 38% and 46%.
Dr Moon further argues that the statistics provided demonstrate that the respondent department has consistently increased the subject land for the two previous periods, from its unimproved value of $66,000 at 1 October 2000, and $78,000 for 1 October 2001. He notes that if the correct statistical increases were applied to the 1 October 2000 valuation, then amended unimproved values of $70,000 (1 October 2001) and $105,000 (1 October 2002) would be appropriate. Dr Moon suggests that the value of $70,000 for 2001 allows for some reduction of the sale price of $78,000, which he argues contained some extra value as the last vacant lot in the street. Dr Moon has moderated that latest figure to $111,000, which is the amount now appealed for, and reflects 50% increase on the previous unimproved value of $70,000.
To explain his estimate of the unimproved value of the subject land, Dr Moon provides evidence of three sales of vacant lands, and four sales of improved lands, in the vicinity of the subject land for the period 1 October 2001 to 1 October 2002 (Exhibit 1 – M11). Those analyses are discussed later in paragraph [35], but Dr Moon suggests that they support his percentage increase estimate of about 50%. He argues that also supports the median price increase in paragraph [25].
Miss Wilson has also compared evidence of the median prices for the relevant period, as a further check on her comparable sales approach (Exhibit 3). Adopting those median price figures for 2001 and 2002, she concludes the following percentage change increases:
PeriodMedian House/ Added Value Land
Landof house
2001$195,000 $120,000 $75,000
2002$315,000 $135,000 $180,000
Percentage increase 62% 13% 140%
Miss Wilson provides her estimate of the added value of an average two storey dwelling from Rawlinsons Building Guide for 2003, and then applies a conservative depreciation allowance of 25% to the new construction costs. She also has evidence from a building company of $160,000 for the new cost of an average dwelling. Adopting the cost of $160,000 for 2001, she concludes a $120,000 added value, and using $180,000, she concludes $135,000 added value for the existing dwellings. On that basis she concludes that the land components were increasing much more rapidly than the depreciated building values.
From her personal experience as a property investor on the Gold Coast, which supports her professional opinion of the broader market in that area, she concludes a significant increase has occurred in land values in the relevant period. However Miss Wilson agrees with Dr Moon that while the median house prices had increased by 62%, the minimum house prices had only increased by 25% (Exhibit 3). Dr Moon suggests that there are pockets in Carlisle Drive where sales were at the bottom end of the market, and would reflect much lower increases than the median figures. However Miss Wilson notes that two sales relied upon by the appellants at 2 Carlisle Drive (sold October 2002 for $285,000), and 5 Carlisle Drive (sold December 2002 for $274,000), fall in the median price range (Exhibit 1 – M8). Dr Moon argues that 2 Carlisle Drive was developed with a large five or six bedroom dwelling, compared to the average two to three bedroom dwellings in that street, and 5 Carlisle Drive backs on to the Robinson Family Park Reserve.
Dr Moon also seeks support for a smaller percentage increase from an analysis of Miss Wilson's Sale 1 (sold October 2002 for $150,000), and Sale 2 (sold May 2002 for $130,000), which he argues reveals a market increase of 15% for that 5 month period, or 36% for a year. Miss Wilson rejects that, as she notes that the sale prices relate to different parcels.
A further matter of concern to Dr Moon is the apparent subjective opinionised approach to the valuations, which Dr Moon argues has no scientific basis to its conclusions. From his earlier training as a scientist, Dr Moon seeks detailed modelling information of Miss Wilson's considerations, so that he can confirm the reliability of her conclusions. He notes for example that she has not quantified the extent of allowances made for the instability of the soils, impact of noise, or impact of vegetation constraints. He notes also Miss Wilson's reference generally to either the land being superior or inferior, which he argues provides no basis by which to measure the outcomes. Miss Wilson rejects that certain allowances should be identified, as she argues that she has used vacant sales information, and based her professional opinion upon the market evidence available on an overall basis.
Miss Wilson agrees that she had considered the old relativities with surrounding parcels, and had made a further deduction of $4,000 to provide for the area disabilities noted previously in paragraph [11].
Comparison of sales -
As noted in paragraph [28] Dr Moon provides the following evidence of vacant land sales:
Sale Area Date Price
1 (23 Albany Avenue 526 m² 1/2002 $152,600
(Currumbin – Lot 165)
2 (25 Panorama Drive, 594 m² 6/2002 $125,000
Currumbin – Lot 26)
3 (27 Taperell Drive, 941 m² 12/2001 $100,000
Tugun – Lot 1)
In drawing comparisons with those sales, Dr Moon questions why the respondent has not used Sale 3 (27 Taperell Drive), as it is just to the east of the subject land. However he provides no direct comparisons with any of his three vacant sales, except to note their area and sale price.
Dr Moon also provides details of the following improved sales:
SaleArea Date Price
4 (Carlisle Drive – Lot 106) 559 m² 12/2001 $175,000
5 (16 Carlisle Drive – 559 m² 2/2002 $202,000
Lot 111)
6 (32 Winders Avenue, 559 m² 2/2002 $315,000 (resold
Tugun)3/2003 for
$405,000)
7 (15 Lansell Avenue, 551 m² 2/2002 $470,000 (resold
Currumbin – Lot 357 10/2002 for
$650,000)
While he was not aware of any major modifications to the dwellings upon Sales 6 and 7, Dr Moon notes that the resale of those two properties reflected increases of 28.6% and 38.3% respectively.
In respect of the sale of vacant land at Sale 1 (23 Albany Avenue), Dr Moon does not rely upon it specifically, but he merely questions why Miss Wilson did not rely on any of those three vacant sales. Mr Cradick suggests that at the date of the sale of 23 Albany Avenue, the department had valued that land at an unimproved value of $250,000, which compared to the quoted sale price of $162,500, suggests that sale may have been a concessional sale. However Miss Wilson does not confirm that suggestion by Mr Cradick, but notes that 23 Albany Avenue and 2 Taperell Drive were older sales in a rising market.
In respect of the sale at 25 Panorama Drive, Mr Cradick argues that company records indicate that sale was a sale to one of the company directors (Ponti), of the vendor Ideal Gate Pty Ltd, again supporting a less than arms length transaction. Miss Wilson notes that the unimproved value of that sale at the date had been $177,500. Dr Moon was unaware of those circumstances, but agrees that sale could be a tainted sale. In respect of the sale at 2 Taperell Drive, Dr Moon agrees that was a dated sale, occurring earlier in the relevant period in a rising market. Dr Moon also concedes that he had not personally inspected the dwelling upon his improved sale at 15 Lansell Avenue, however he notes that there are good quality houses, including both new and renovated dwellings, in Lansell Avenue, and adjoining Crest Drive, and that area has ocean views, and is a well sought after location. Miss Wilson notes that Lansell Avenue and Crest Drive are also subject to aircraft noise. In respect of his use of any median sale price statistics, Dr Moon is aware of inherent problems in relying upon those statistics as a totally reliable indicator.
In selecting his comparable sales, Dr Moon argues that it is important to only consider sales of areas less than 650 square metres, as lots of those sales provide similar restrictions on the capacity to build upon them. However he agrees that residential lands are purchased upon a site value approach, where larger area lots tend to attract just a marginal extra cost. He also agrees that where existing dwellings are purchased, and then demolished or removed to construct a new dwelling, then additional costs would be involved in returning any parcel to a vacant state.
Miss Wilson provides evidence that, while there are no sales of vacant lands in Carlisle Drive, there were hundreds of sales on the Gold Coast that could have been seen as comparable, but she has selected her four sales as the most relevant. She has used the same range of sales that Mr Crowley had used in the original valuation, and argues that it is comparisons with those sales which are important, not analyses of the SMA. She has also sought sales which occurred as close as possible to the relevant date of October 2002. She also argues that there is no evidence of any scarcity of sales in that area. Miss Wilson advises that there are difficulties in examining improved sales, because of the need to ascertain depreciation rates and added values of improvements, and she prefers comparisons with sales of vacant land.
Miss Wilson provides the following sales of Residential A lands:
· Sale 1 – (31 Irene Street, Tugun – Lot 19 on RP 165613). This is a vacant lot of area 616 square metres, located about 1.6 km. south-east of the subject land. Access is good to Irene Street, which is bitumen sealed with concrete kerbing and channelling. The sale is a rectangular lot sloping moderately to the rear, and with a frontage across Irene Street to a timbered reserve (Lot 44). The lot also fronts parkland to its northern side boundary, and there is a 51 square metre easement along its western (rear) boundary (Exhibit 8 – photographs). Overall the sale is seen as inferior to the subject land due to its location, quality of surrounding residences and proximity to the airport. The sale sold in October 2002 for $150,000, was analysed at $144,750 and applied at $125,000 (86%).
· Sale 2 – (14 Castle Court, Tugun – Lot 22 on SP 100890). This is a vacant lot of area 628 square metres, located about 1.4 km. south-east of the subject land. Access and services are similar to Sale 1, and the sale is an irregular shape lot falling moderately to its rear (southern) boundary. There is a pathway to the eastern border, and also an easement (80 square metres) to that boundary. Overall the sale is seen as inferior to the subject land. The sale sold in May 2002 for $130,000, was analysed at $128,509 and applied at $122,000 (95%). The parcel resold again on 2 May 2003 for $180,000, and a single residence has since been built upon that site.
· Sale 3 – (18 Sawtell Drive, Currumbin Waters – Lot 213 on RP 199885). This is a 749 square metre vacant parcel located about 2.5 km. south-west of the subject land. Access and services are similar to the other sales, but the sale is much further removed from the beach. The sale is an irregular shape lot falling gently to the rear (southern) boundary. The sale has an elevated outlook. Overall the sale is seen as superior to the subject land due to its larger size and elevated aspect, but is in an inferior location. The sale sold in July 2002 for $160,000, was analysed at $159,000 and applied at $135,000 (85%).
· 67 Blamey Drive, Currumbin (Lot 24 on RP 181313). This is a 1,719 square metre vacant parcel located about 0.4 km. south-west of the subject land. Access and services are similar, and the sale is an irregular shape lot rising steeply to its rear (western) border. From the building area towards the rear there are views to the surrounding residential areas. The sale is a larger lot close by to the subject land, and overall is seen as superior to the subject land. The sale sold on 28 February 2003 for $240,000, was analysed at $239,000 and applied at $180,000 (75%).
In explaining her application of that sale in a rising market, Miss Wilson explains that in order to be conservative she had only applied Sale 4 at 75%, as it occurred after the 1 October 2002 date. She bases those application rates on her assessment of the level of the market at that time, compared to the relevant date. While she had not specifically mentioned the adjoining parkland to her Sale 1 (31 Irene Street), she notes that she had also not specifically mentioned the private reserve area near the subject land.
Dr Moon argues that, in his opinion, the impact of aircraft noise at Sales 1 and 2 of Miss Wilson had tended to overemphasised due to their closer proximity to the airport. In fact he argues that due to the lower elevation of the descending aircraft nearer the airport runway, and the buffer area of the quarry face site and vegetation upon Lots 44 and 46 near Sales 1 and 2, the noise levels tend to be more reduced on impact. However it is agreed that there are no noise recordings to either refute or support such a conclusion. It is also noted that the location and design of the new dwelling upon Sale 2 (Exhibit 9) could also suggest the presence of noise problems in that area. But like the lack of noise recordings, those are merely subjective comments which provide little assistance in assessing the actual noise intrusions at Sales 1 and 2.
Miss Wilson further advises that, while there are newer dwellings near her Sales 1 and 2, those tend to be fairly standard dwellings compared to those in Carlisle Drive, and market indicators suggest that Currumbin is seen as a more desirable area to live. Miss Wilson also provides further background to her Sale 2 (14 Castle Court), which she advises sold in September 1998 for $70,000, then resold in August 2001 for $80,000, and again in May 2002 for $130,000, and later in May 2003 for $180,000. That parcel later resold as an improved dwelling for $620,000. Dr Moon notes that most of Miss Wilson's sales do not suffer from similar vegetation restrictions and unstable soils that impact the subject land.
Decision:
I turn first to Dr Moon's concerns that the respondent department should be bound to the evidence upon which the original valuation had been determined by Mr Crowley. In that matter I turn to the decision in Mayne Property Development Pty Ltd v Chief Executive, Department of Lands (AV94-64) 16 February 1996, unreported, where the President said at 7:
"In my opinion there is no merit in the appellant's argument. Whatever the respondent's obligations to provide information under the Freedom of Information Act, this does not prevent him from relying on additional information before this Court. He is not required to advise the appellant of his case in advance. Here there are no pleadings by which a party is bound. On most occasions, neither party will know with any certainty what sales the other will be relying upon until they are produced at the hearing.
The unimproved value of a parcel of land is a matter of fact. A valuer forms an opinion of that value based on the evidence he has available at the time of making the valuation. Other evidence may subsequently come to his attention. If, upon closer investigation, he finds that other sales support his opinion then he is entitled to include them in his evidence or substitute them for his initial evidence."
Now since that date there have been amendments to the Land Court Rules 2000 which now require, under s.23, that expert evidence be exchanged prior to the actual hearing. However that does not preclude the expert from forming his opinions based upon the total evidence as it appears relevant to him at that time. There is also scope, with the leave of the Court, for variations under s.23(3). I see no reason why Miss Wilson should be restricted in her sales evidence supplied in this matter.
I note also that the legislation places the onus to prove his grounds of appeal upon the appellant under s.45(4) of the Act, and also that in respect of the determined unimproved value, that is deemed to be correct under s.33 of the Act unless it is proved to the contrary.
In respect of Dr Moon's concerns with the Council's attitude to the removal of vegetation under the Local Area Plan, I note that Miss Wilson is aware that such Council's advice may be given. I note also that she is aware of legal precedent influencing the Council's duty of care in respect of any removal of trees which could become a hazard to public safety, and she has allowed for that in her valuation (see paragraph [11]).
While the matter of a duty of care by a Council is not a matter of concern in this instance, the importance of appropriate care in investigations in such matters is worthy of note. For instance in the recent decision of Timbs v Shoalhaven City Council [2004] NSWCA 81, 1 April 2004, the New South Wales Court of Appeal awarded damages in a case involving a large spotted gum tree under a TPO of some 30 metres in height, and located only 10 metres from the appellants' dwelling. On two previous occasions in 1996 and January 1998 Mr Timbs had sought approval of the Council to remove the four similar trees, which he felt were unsafe to his house. On both occasions his request was refused. In July 1998 one of those trees was blown down in a storm, and demolished the dwelling, killing Mr Timbs.
The Court of Appeal found that the Council was not bound to offer an opinion whether the tree in question was "dangerous", and could therefore be removed. However it found that one of its officers had expressed that opinion, and on that advice approval to remove the tree was refused. As that officer thus took it upon himself to express an opinion that the tree was safe, the duty of care was higher than that expected of a lay person, and thus required a reasonably informed diagnosis by that officer, or for him to refer the tree to a specialist. In the Timbs matter the Court of Appeal found that the inference was open that a reasonably informed diagnosis would have revealed the decayed structure of the roots and the tree would have been pronounced dangerous. It is likely that the Council would consider such precedent in the current matter in respect of any development applications from the appellants on the subject land.
I note also Dr Moon's concerns that self-represented litigants under the Integrated Planning Act 1997 (IPA) are at a decided disadvantage when challenging any decision of local governments. On that understanding I can accept that the appellants may feel that the powers of the Council to refuse an application to remove certain trees could be unfettered, and those restrictions could bear upon the market value of the subject land. But Miss Wilson has made some allowance for such disabilities.
Whether any changes to IPA should be made to better balance the financial capabilities of opposing litigants under that Act, or whether residential lot sizes are not really appropriate, are not matters for consideration by this Court. However the well researched text "The Quarter-Acre Block – The Use of Suburban Gardens, Canberra" by Ian Halkett (1976) Australian Institute of Urban Studies (Publication No. 59) would appear to be now overshadowed by other forces. In that study Halkett found that a major attractiveness of suburban gardens in that era was the opportunity that private residential lots provided for healthy recreational pursuits for both parents and children. The wisdom of our forebears in providing a place for children to play off the streets was seen as a positive social asset. Of course the relative size of residential lots needed to be larger than the earlier cramped living areas common in many early industrialised cities of other nations. Halkett concluded that the Quarter-Acre lot provided more benefits to society compared to the costs of providing such living areas. I note also that Dr Moon's assertion that the modern trend for smaller residential parcels is more a matter of concern by public authorities to restrict developed areas, possibly in response to developer aspirations, rather than any overall public demand for smaller lots. It would be interesting to see that assertion tested within the general community, but that also is not a matter for my consideration.
Impact of noise –
In respect of any difference in noise impact, I note that Dr Moon has used his experience of public complaints against aircraft noise to indicate his conclusion that noise abatement may be occurring in the Tugun Heights locality to the south of the airport approach paths. Now aircraft noise is a matter that has been investigated at some length in association with busy aircraft movements. The fact that noise exposure forecast mapping exists, confirms the need to allay public concerns. A simple understanding of the physical principles associated with noise transmission, confirms much of what Dr Moon concludes. Physical restrictions such as a quarry face and dense vegetation can influence transmissions of noise levels. The nature of the topography and vegetation to the north-east of Sales 1 and 2 (Exhibit 8 – photographs) would suggest that may be occurring, or the public perception to that effect.
However it is not the role of this Court to investigate such matters of its own volition. That was emphasised by the Land Appeal Court in JL and I Qualischefski & Ors v Valuer-General (1979) 6 QLCR 167, where it said at 172:
"The reasonableness of the allowances that have been made is always open to challenge on objection or appeal. However upon appeal a statutory onus of proof is cast upon the appellant and he has to accept, within the confines of the grounds set out in his Notice of Appeal to the Land Court, the burden of proving the Valuer-General incorrect. Neither this court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-General to substantiate his case. This is in contradiction to jurisdiction conferred under the Land Act.
In appeals of the nature of the subject, the onus which the appellant must assume is not an easy one to discharge without the assistance of a registered valuer who can lead evidence as to sales analyses and/or comparison with valuations made by the Valuer-General in respect of comparable properties."
I note also in respect of whether this Court has the power to probe the correctness of the Chief Executive's decision on this valuation, the decision in BT Dillon v Valuer-General (1986-87) 11 QLCR 231, where the Land Appeal Court said at 233:
"The Legislature has not given this Court any investigatory powers under the Valuation of Land Act. If the Appellant's case is not strong enough in its own right to establish the values contended for or to disprove the Valuer-General's values, the Court is not empowered of its own volition to probe the fairness or correctness of the Valuer-General's values and by this means arrive at its own estimate of value."
However that does not mean that the Court cannot determine its own opinion of the correct unimproved value based upon the evidence supplied. That is provided for in s.66 of the Valuation of Land Act 1944 which states:
"66. Order of Court
Upon an appeal under section 55 the Land Court or, upon the rehearing of any such appeal, the Land Appeal Court may –
(a) affirm the valuation appealed against; or
(b) reduce or increase the amount of that valuation to the extent necessary in its opinion to determine the same correctly under, subject to, and in accordance with this Act;
and, subject to section 70, make such order as it sees fit with respect to the payment of costs."
The method of valuation –
I turn then to the methods of valuation suggested by Dr Moon, and I find that he has suggested a percentage change approach based upon statistical indices. Dr Moon accepts that a median value for a particular statistical period refers to the value of the midpoint of the array covering the selected population. In respect of the selected sales analysed by Dr Moon, it is likely that the range of sale prices can vary in 2002 from the low of $125,000 to a high well in excess of the median value of $315,000 (Exhibit 3). Clearly the sale price depends upon the particular features of each sale, and any statistical influence could only relate to a general trend in the market.
While I am aware that such percentage rises in values are often of concern to appellants in seeking to have confidence that their personal property has been fairly treated in any valuation, they in fact do not prove conclusively that an error has been made in the valuation process. Such rises may, at best, be an indicator to owners that they should further investigate the valuation, but there are many reasons why a valuation has changed at what would appear to be a rate out of line with an overall statistic percentage.
This matter has been considered many times by the Court, and I note from precedent that a large increase in itself is not evidence of some error in the valuation. I note, for example, in the decision of NR and PG Tow v Valuer-General (1978) 5 QLCR 378, where the Land Appeal Court said at 381:
"It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation."
That matter was also considered in CH and BD Henricks v The Valuer-General (1983) 9 QLCR 59, where in the Full Court of Queensland, Macrossan J (later CJ) said at 63:
"The appellants also relied upon a schedule, Exhibit 4 in the Land Appeal Court, which shows percentage increases in the value applied by the Valuer-General to a number of selected parcels of land from the date of the preceding valuation up to the March 1979 valuation date. The percentage increase shown in the selected case was in each instance considerably less than the increase applied to the subject land as between the two valuation dates. The weakness in such a selective comparison is obvious as there could be any number of reasons why blocks in the same valuation area should increase at different rates over a period of five years."
As the Full Court said, there could be many reasons why parcels of land can increase at different percentage rates over a period of time. The real test is not the percentage increase in the unimproved values, but a comparison of the subject land with sales of comparable sites in the vicinity of the subject land at the time of the valuation.
In the matter of whether the Chief Executive should make greater reliance upon other statistical evidence, I note that it is the market value of the land, devoid of any improvements which is to be determined. The long-held test of "market value" was established by the High Court of Australia in Spencer v The Commonwealth of Australia (1907) 5 CLR 418, where Griffith CJ said at 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 for it 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?’"
The test to be applied in determining that value was further clarified in by Isaacs J in Spencer at 441:
"To arrive at the value of the land at that date, we have … to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property."
I note also Dr Moon's concerns that where there are no sales of vacant lands in the area, then monopolistic forces tend to push up the price of any lands. However that is really the basis of normal market relations, and it only reaches an unacceptable level where scarcity is agreed to exist. Miss Wilson rejects that scarcity is a factor in Currumbin and Tugun. As noted by Samuelson in his text Economics, an Introductory Analysis, 3rd edn. McGaw Hill Book Company Inc. at 38:
"All economic life is a blend of competitive and monopoly elements. Imperfect or monopolistic competition is the prevailing mode, not perfect competition."
The effect of operation of a normal supply and demand interface in any competitive property market, requires impacting factors to have a degree of economic elasticity in order for the normal market outcomes to occur. Where some monopoly body gains control of those forces, that body may be seen to control the supply of the product in the society, and thus to take advantage of any inelasticity of demand in the community to increase the price of the product.
In determining the unimproved values of land, where adequate comparable sales exist, I am reminded by Mr Cradick of the decision 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. 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."
I turn then to Dr Moon's concerns that the subjective opinions of Miss Wilson provide no rigorous quantification upon which to check her conclusions. Now I accept that Dr Moon's scientific background would lead him to that conclusion. However the task of Miss Wilson as a professional valuer is to seek to understand and interpret the market place as demonstrated by the sales evidence. The task of a valuer was clearly defined in Chief Executive, Department of Natural Resources v Radlett Enterprises Pty Ltd (1997-98) 18 QLCR 397, where the Land Appeal Court said at 404:
"As Mason J said in Federal Commissioner of Taxation v St Helen's Farm (ACT) Pty Ltd (1980-81) 146 CLR 336 at page 381:
'Valuation is a matter of estimation, not of precise mathematical calculation.'
Valuation is intended to be an interpretation of a market, which in itself is imprecise, even when it is created by vendors and purchasers who satisfy the often quoted qualifications necessary to meet the test explained in Spencer v The Commonwealth of Australia (1907) 5 CLR 418."
If I look also at Miss Wilson's analysis of the statistical median sales figures (paragraph [29]), I find that she has demonstrated the principle of the added value of improvements contained in the sales of developed land. There is no evidence to reject her estimate of depreciation from the new building costs, and her analyses demonstrate how on median values the land components (140%) are increasing at a greater rate than the median sale price (62%), because the added value of the dwelling is reducing. That difficulty of measuring additional factors such as depreciation, demonstrates why sales of vacant lands are preferred (PH Clough v Valuer-General (1981-82) 8 QLCR 70, at 76).
Comparison of sales –
The only direct comparisons provided by Miss Wilson for her sales of vacant lands are as follows:
Sales Area Date Analysed Value Comparison 1
(31 Irene Street)616 m² 10/2002 $144,750 Inferior 2
(14 Castle Court)620 m² 5/2002 $128,509 Inferior 3
(18 Sawtell Drive)749 m² 7/2002 $159,000 Superior/larger 4
67 Blamey Drive1,719 m² 28/2/2003 $239,000 Superior/larger Subject land 559 m² - $130,000 - There is nothing in those conclusions to indicate that Miss Wilson has made a fundamental error or applied an incorrect principle (Brisbane City Council v The Valuer-General (1977-78) 140 CLR 41, at per Gibbs J at 56).
Now while the judgment of an experienced valuer is a legitimate guide to her professional opinion of an area, it is always important to ensure that such judgment is supported by evidence in the market place. That was outlined in the text in Land Valuation and Compensation in Australia, Rost and Collins (3rd edition) 1984, which read at 22:
"A registered or licensed valuer is regarded as a person who possesses special training. He is entitled to express opinions as to value or other matters appertaining to his vocation, but these cannot be more valid than the information and reasoning upon which they are founded. In general, opinion evidence is not admissible unless it is given by a witness called as an expert. Court judgments have emphasised that the weight of an expert's opinion concerning the value of land depends upon the foundation upon which it rests."
That was also followed in the decision of the Land Appeal Court in Santos Limited v Valuer-General (1988-89) 12 QLCR 231, which followed the principle that a value based upon sales was "to be preferred to a valuation based on opinions". (p.235/6).
It is always therefore important to contrast the personal views and aspirations of a skilled person in land matters, with the views of the so called "hypothetical purchaser" in the market place. In the end it is the hypothetical vendor and purchaser who establishes the value of land (see Spencer v Commonwealth of Australia (supra). Those principles have ever since determined how a bona fide sale was to be assessed. In the end the value of a parcel, and the relative value of the locality, must be supported by the evidence of bona fide sales in the free market place.
Now I look at Miss Wilson's Sale 4 (67 Blamey Drive), which I know occurred on 28 February 2003, some five months after the relevant date of 1 October 2002, but only four days after the day of issue of the valuation. Now the relevant period for consideration of evidence to support or amend valuations in this matter is up to and including the date of issue of the valuation which was 24 February 2003. After that day any subsequent sales is more properly related to a subsequent valuation (see KP and RD Weisenberger v The Valuer-General (1978) 5 QLCR 125; and also RG McMurray v The Valuer-General (1983) 9 QLCR 35, at 36).
But subsequent sales are not necessarily excluded from the comparison. However the respondent would need to establish that the circumstances surrounding those sales has not changed, from those existing at the relevant period up to the 1 October 2002. Guidance is to be found in McCathie v Federal Commissioner of Taxation (1944) 69 CLR 1, where Williams J said at 16:
"But subsequent events can be taken into account in order to determine the proper weight to attach to such circumstances. Subsequent sales are just as admissible in evidence as prior sales, provided that in all the circumstances they are comparable. If between the material date and the date of subsequent sale supervening events occur which alter the conditions previously existing, the subsequent sales would not be comparable and would be useless."
That principle was also followed by the High Court in Daandine Pastoral Company Pty Ltd v Commissioner of Land Tax (1943) 7 The Valuer 299 at 304; and also in Federal Commissioner of Taxation v Harris (1980) 30 ALR 10 at 18 (see also 37 FLR 325). However in Harris, Fisher J noted at 25, that the subsequent event, cannot create an expectation which was not in existence at the relevant date, but the subsequent events can be taken into account in order to determine the proper weight to attach to circumstances in existence at the relevant date. I believe that Miss Wilson's lower application of that sale at only 75% of its analysed value, makes adequate allowance for the rising market at that period.
Conclusion:
In summarising this matter the appellant has not demonstrated that the Chief Executive has made any fundamental error, or adopted a wrong legal principle. The appeal is dismissed, and the unimproved value as determined by the Chief Executive in the sum of One Hundred and Thirty Thousand Dollars ($130,000) is affirmed.
NG DIVETT
MEMBER OF THE LAND COURT
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