Neil L & Rita I Schwartz v. Chief Executive, Department of Natural Resources

[1999] QLC 78

LAND COURT

BRISBANE

23 JULY 1999

Re:	AV98-331
An appeal against an Unimproved Valuation
Valuation of Land Act 1944
City of Cairns

Neil L and Rita I Schwartz
v.

Chief Executive, Department of Natural Resources

(Hearing at Cairns)

D E C I S I O N

Mr and Mrs Schwartz are the owners of land described as Lot 16 Registered Plan 718464, Parish of Cairns, County of Nares, containing 718 m². The land is situated at 32 Oxley Street, Edgehill, about 6 km north-west of the Cairns Central Business District.

The land is zoned "Residential" and is improved with a dwelling in which the appellants reside. Oxley Street has a bitumen sealed surface to concrete kerbing and channelling. Electricity, town water, sewerage and telephone services are connected.

The chief executive issued a notice of unimproved value of the land, as at 1 October, 1997, in the amount of $76,000. An objection against that valuation was disallowed and the owners exercised their right to appeal against that decision. They estimate the unimproved value to be $63,500.

Mr Schwartz appeared at the hearing and conducted the appellants' case. He gave evidence in support of a written submission which set out the basis of the appeal. The appellants had limited their grounds of appeal to a comparison of the valuation of the subject land with the valuation applied to land on the opposite, southern frontage of Oxley Street. They also held the opinion that there should have been no increase in the general level of value in the subject locality, since the previous date of valuation.

Mr Schwartz identified the land across the road with which he made the comparison as being Lot 159, containing 769 m². At the relevant date, that land had been valued at $75,000. The previous valuation of that land had been $68,000 ($70,000 on the subject) according to the grounds of appeal. The appellants' estimate of value had been obtained by directly applying the pro-rata value per m² as calculated from the previous valuation ($68,000) of Lot 159 to the area of the subject land.

There is sufficient evidence available to find that the level of value suggested

Although that calculation adopted the same unit of area value, Mr Schwartz held the opinion that the subject land suffered a significantly greater rainwater run-off disability than did Lot 159 which although on the slightly lower side of the street, was protected by the street drainage. Water from the more elevated land to the rear (north) and to the west flowed in a south-westerly direction across the subject land and had necessitated drainage works to mitigate the problem. Tropical downpours tended to cause temporary flooding of the frontage area whilst the land opposite did not suffer that disability.

Mr Schwartz also referred to what he perceived to be a superior visual amenity from the opposite street frontage, with the northerly outlook encompassing the range backdrop.

Miss HJ Wilson is a registered valuer employed by the Department of Natural Resources. She had not been the valuer who carried out the valuation appealed against but had made a detailed inspection of the relevant sales evidence and the subject property, and agreed with the amount of the valuation which had been applied. Miss Wilson described the land as a regular rectangular shaped allotment situated slightly above road height with a level building contour.

Two schedules of sales evidence were produced. One contained details of seven sales in the period relevant to the valuation, which were intended to indicate the range of prices paid for residential sites in the residential central core of Cairns. Sale prices ranged from $57,000 to $132,500. Two green street lots with areas of 306 m² and 315 m² respectively had each sold for $60,000.

The second schedule contained details of five sales in the general locality of the subject land. Mr Schwartz was provided with a copy of Miss Wilson's report and the relevant sales schedules. Suffice to say that Mr Schwartz was unable to challenge the evidence of Miss Wilson that two of the sales were of inferior quality land and three of superior quality, all supporting the general level of value which had been applied to the subject land. The sales, as may have been expected, showed increasing levels of value as the elevation of the land and its desirability for residential use, improved.

by the appellants for the subject land, was clearly too low. rata values based on a value per m² should be applied to residential lots differing in size. Miss Wilson is firmly of the opinion that residential lots are bought and sold on a site value basis and while the size of a site is one of the criteria which affect value, it does not affect value on a strict pro-rata basis. That opinion is consistent with evidence throughout Queensland which has been accepted by the Land Court and the Land Appeal Court on numerous occasions. For example, in H and E Grahn v. The Valuer-General 14 QLCR 327 at p.330, the Land Appeal Court had this to say:

" In the appellants' submission there is no reason why two blocks with the same position and outlook should be valued at such apparently disparate rates. Blocks should be valued at the same rate per square metre. …

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."

Miss Wilson's evidence was that in her opinion, the outlook from either the subject land or the lot used as a comparison by the appellants was similar, depending on personal choice, and if one outlook was to be preferred by an individual over the other, the design of any house proposed for either lot (in their notional unimproved state) would be expected to vary accordingly. While there was not a significant difference in elevation, the subject land was higher than Lot 159 and the sales evidence reflected that increased level of elevation brought with it an increasing level of value. In Miss Wilson's opinion, had the subject land and Lot 159 been of similar size then she would have valued the subject land at a slightly higher amount than the existing valuation.

As I understood Miss Wilson's evidence, although she described the subject land as having "a level building contour" (a statement with which Mr Schwartz disagreed) she did not disagree that the topography was gently sloping and the drainage works which Mr Schwartz saw as necessary would have been a development cost factor. However, the sales evidence upon which she relied suggested to her that elevation, even with consequent drainage considerations, had a dominating effect on residential site value.

Findings the amount of Seventy-six Thousand Dollars ($76,000), as at 1 October 1997, is affirmed.

The sales evidence supports the level of value applied. The relativity
argument based on size, at least on the pro-rata calculation contended for by the
appellants, fails. Once it is accepted that the same sales evidence would have formed
the basis of site valuation for both the subject land and Lot 159, the question of
correct relativity is a matter which requires consideration.
All things considered, including size, elevation, visual aspect, degree of slope
and matters associated with rainwater run-off, the degree of difference in site value
would appear to be relatively insignificant, as the values applied at the relevant date
in this matter, indicate.
Miss Wilson has given detailed professional consideration first to the question
of sales evidence then to matters of relativity, not only with Lot 159 but to individual
lots within the immediate locality. Mr Schwartz has had the practical benefit of
having lived on the subject land for many years and understands, in particular, the
water run-off disability. While he had, before retirement, long experience in local
government and has intimate knowledge of the effect of valuations on the rating
burden carried by land owners, he has no formal valuation experience. In the end
result, I am persuaded by Miss Wilson's evidence that there would be some market
preference, albeit relatively insignificant, for the subject land in direct comparison
with Lot 159. I see no reason to disturb the relativity which is reflected by the
valuation appealed against.

RE WENCK
MEMBER OF THE LAND COURT