Nutting v Chief Executive, Department of Natural Resources
[1999] QLC 11
•4 March 1999
LAND COURT,
[1999] QLC 11
BRISBANE
4 March 1999
Re: Appeal against Annual Valuation –
Valuation of Land Act 1944 –
Valuation Roll No: 16510/16600
Local Government: BCC-Yeerongpilly
(AV98-576)
David and Margaret Nutting
v.
Chief Executive, Department of Natural Resources
D E C I S I O N
Background:
This matter relates to a property situated at 15 Monford Place, Calamvale, and described as Lot 22 on RP 225104, Parish of Yeerongpilly. The subject is located about 17 kms south of the Brisbane GPO, has an area of 759 square metres, and is zoned as “Residential A” under the Town Planning Scheme of the Brisbane City Council of 13 June 1987, and effective at the date of valuation of 1 October 1997. Access to the subject is easy from Monford Place which is a cul-de-sac, and is bitumen sealed with concrete kerb and channelling. Water, telephone, electricity and sewerage are available. The subject has an irregular shape, and falls gently (about 2 metres) from north-east to south-west. The parcel has a slightly higher elevation compared to surrounding parcels, to the south and west. The key issues are changes in the unimproved value, relativity, the method of valuation and comparison of sales.
The subject is adjoined to the east by a battle-axe parcel (Lot 21), which has access to Monford Place by a narrow access strip. The land rises towards the north-east towards a gentle ridge line passing from north to south across Sheldon Street and passing through Lot 12 which is two lots removed to the east of the subject.
On 9 March 1998, the Chief Executive, Department of Natural Resources, issued a valuation of the subject at $69,000. Following an objection the Chief Executive confirmed that figure on 25 August 1998. The appellants have now appealed that figure claiming the unimproved value should more properly be $60,000. An unsuccessful Court-supervised preliminary conference was held with the parties on 22 October 1998, and the matter was heard on 7 December 1998.
Mr D Nutting appeared and gave evidence on behalf of the appellants. Ms C Watt, Crown Law Legal Officer, represented the respondent, calling evidence from Mr SA Nimmo, the Departmental Registered Valuer responsible for determining the valuation.The Evidence:
(1)The grounds of appeal –
In providing their grounds of appeal the appellants have provided seven items. Of those the appellants agree that Grounds 2 to 5 relate merely to the possible impacts of the rise in the valuation, and have no bearing on how the unimproved value was determined. It is agreed therefore that those four grounds have no direct bearing to this matter. The remaining three grounds of the claim are as follows:
(1)Valuations have been static for four years.
(6)The respondent should support the valuation by proof.
(7)No reasons for the increase were provided by the respondent, or why the objection was refused.
(2)Changes in the unimproved value –
The appellants argue that the valuation of the subject had risen from $49,000 (1990), to $55,000 (1991), $61,000 (1993) and to $69,000 (1998). Mr Nutting notes that during the period 1993-1997 (five valuations) the unimproved value had remained consistent at $61,000. He believes that represented the state of the market, and he claims there was no reliable evidence to support a 13.1% increase in 1998.
To support their claim the appellants provided evidence of newspaper articles of 25 March 1998, and 18 July 1998, which purported to disclose that vacant land sales on the Gold Coast have fallen by 50% and general values in several suburbs, including Calamvale, had “suffered a marked drop in values” during the same period. The articles were attributed to the Real Estate Institute of Queensland, and contrasted to former increases in valuations in the suburbs prior to 1992. The articles claim that, due to an oversupply in those suburbs, development had slowed down since 1994. In view of such comments which were supported by the opinions of other real estate agents, the appellants argue that it is illogical to increase the unimproved value of the subject during 1998. They further argue that the changes also seemed illogical in view of reductions to unimproved values for parcels in the same suburb but south of Palatine Street. Mr Nimmo disagrees with placing any significance upon the press articles as, in his opinion, they draw too generalised conclusions.
Mr Nutting argues that a reason for the decline in demand in the area, and consequently in the value of the parcels, may be found partially in the large growth in demand and development of a new “Devine estate” to the west of Beaudesert Road. Those parcels tend to be for improved house and land packages, at reduced prices, on much smaller lots, and higher densities. Mr Nimmo agrees that there had been a large growth in improved sales in the “Devine estate”, but argues that those sales represent a distinctly different type of market to the subject area, either north or south of Palatine Street.
(3)Relativity –
Mr Nutting argues that relativity between surrounding parcels suggests that an inconsistent approach has been applied to those parcels. He notes in particular the following parcels:
PARCEL ADDRESS UNIMPROVED VALUE
1
Cnr Dalwood and Palatine Streets
(Lot 17 on RP 810107 – 809m²)
$70,000 2 Palatine Street
(Lot 1 on RP 220072-800m²)
$70,000 3 Cnr Palatine & Parkland Streets
(Lot 1 on RP 889843 – 648m²)
$52,000 4 Monford Place
(Lot 21 on RP 225104 – 981m²)$76,000 5 Sheldon Street
(Lot 12 on RP 225104 – 1031m²)$69,000 6 Sheldon Street
(Lot 11 on RP 225104 – 1063m²)$69,000 7 Sheldon Street
(Lot 1 on RP 887272 – 679m²)$77,000 8 Sheldon Street
(Lot 33 on RP 225104 – 816m²)$74,000 9 Sheldon Street
(Lot 34 on RP 225104 – 1149m²$77,000 Subject Monford Place
(Lot 22 on RP 225104 – 759m²)$69,000 Mr Nutting notes that Parcels 4, 5 and 6 are all battle-axe lots of comparable areas, and all larger than the subject. Parcels 5 and 6 have about the same elevation, and both have unimproved values of $69,000, which is $7,000 less than Parcel 4. Mr Nimmo argues that the difference between Parcels 5 and 6 and Parcel 4 is because the former have inferior access and visibility to Sheldon Street (which has greater traffic), than does Parcel 4 to Monford Place. However he agrees that there would appear to be some inconsistency in the difference between the unimproved values of those three parcels. He advises that when he conducted his field inspection of those parcels, from Sheldon Street, his inspection had been partially obstructed by houses in Sheldon Street.
In comparing Parcels 7, 8 and 9 Mr Nutting notes that Parcel 8 was larger than Parcel 7, and was on the high side of Sheldon Street, and about 2 metres higher in elevation. He also notes that Parcel 9, which is a battle-axe parcel, is much larger and has good views from the rear towards the east across an adjoining public park. Mr Nimmo confirms that the lesser unimproved value of Parcel 8, compared to Parcel 7, would have been partially to allow for the access strip of Parcel 9 passing down the eastern side of Parcel 8. He also confirms that he was unsure of why there had been a $3,000 difference applied to the two parcels in view of the better views from Parcel 9.
Mr Nutting advises that Lot 38 immediately adjoining Parcel 9 to the east was in fact also part of the public parklands. From an inspection of the photographs supplied to the Court, the views across the parklands to the rear of Parcel 9 would appear to have more extensive and interesting vistas than those available at the front of Parcel 7. Mr Nimmo argues that the owner of Parcel 7 claims that views towards the rear of that parcel are also pleasant across the sloping land to the south-west. Mr Nimmo apparently did not personally inspect Parcel 9, or the immediate parklands adjoining that parcel.
In seeking comparison with Parcels 1, 2 and 3, Mr Nutting notes that comparable parcels to the north of Palatine Street all appear to have been increased in value (about 13%) in the current valuation, while parcels to the south of Palatine Street appear to have been reduced in value (about 5%). Mr Nimmo confirms that he had amended the relativities in that area, based upon the sales evidence, and his considered opinion about the general established amenity of the two areas and the amount of traffic passing through the area. For example he sees Sheldon Street, which services the northern area as having a much lesser traffic flow than Palatine Street, which services the southern area. It was agreed that, as Palatine Street is a “dead end” roadway, the extent of traffic movements related only to that generated in the local areas.(4) Comparison of Sales –
In support of his estimate of the unimproved value of the subject Mr Nutting sought comparison with the following sales:
· Parcel 1 - (Cnr Dalwood and Palatine Streets)
This corner parcel was sold as a vacant lot in April 1991 for $75,000, and then re-sold as a vacant lot in January 1998 for $74,000, after being on the market for about three years. From personal discussions with the new owner of Parcel 1, Mr Nutting concludes that the sale indicated the general market at that time. Mr Nutting believes Parcel 1 is inferior to the subject (transcript p.13). It has an applied value of $70,000, and the parcel has substantial fill placed upon the southern frontage to Palatine Street, which would impact the unimproved value.
· Parcel 2 – (Palatine Street))
This is an inside vacant lot which sold in April 1998 for $62,000 and, following the construction of a new dwelling, was resold by a developer in June 1998 for $179,000. The current applied value is $70,000.
· Parcel 3 – (Cnr Palatine and Parklands Streets)
This is a vacant corner lot which sold in November 1994 for $90,000, and resold in September 1998 for $65,000. The sale has a regular shape, is seen as low-lying, and is located at a lower elevation to the subject, and opposite Parcel 1.
In support of his valuation Mr Nimmo analysed 25 sales of unimproved land in that area, and selected the following “Residential A” sales as representing a fair medium range of the comparable sales, which are indicative of the area, and which have similar characteristics to the subject:
· Sale 1 – (12 Hickory Place – Lot 43 on RP 227353)
This is an irregular shaped lot of area 798 square metres in a cul-de-sac and has a slight slope from north-east to south-west, with a north-easterly aspect. The sale is located about 1 km south-west of the subject, and there are some views to the south. The sale is seen as having a superior shape and elevation, but an inferior location. Overall the sale is seen as similar.
The sale sold in October 1997 for $78,000, which was analysed at $77,000, and applied at $69,000.
· Sale 2 – (7 Boronia Close – Lot 912 on RP84283)
This is a slightly irregular shaped lot of area 712 square metres in a cul-de-sac, and slopes from the road about 4 metres from front to rear. The sale has a westerly aspect and is seen as inferior overall due to elevation, size and location. There is an access strip to the adjoining battle-axe Lot 911 along the northern boundary.
The sale sold in March 1997 for $66,500, and was analysed at $65,500, and applied at $61,000.
· Sale 3 – (14 Darling Close – Lot 24 on RP 850593)
This is an elevated battle-axe lot of area 874 square metres with a small frontage beside a pathway between Darling Close and Palatine Street. Overall the sale is seen as similar due to its superior attributes, but its less established inferior location.
The sale sold in November 1996 for $77,000, and was analysed at $76,000, and applied at $69,000.
· Sale 4 – (Sheldon Street – Lot 1 on RP887272)
This is the same parcel as the appellants’ Parcel 7, and has an area of 679 square metres. The sale is located about 40 metres north-east of the subject, and has a slightly irregular shape, and slopes gently from front to rear towards the south-west. Overall the sale is seen as superior, due to its shape, elevation, frontage and similar location.
The sale sold in October 1997 for $85,000 which was analysed at $84,000, and applied at $77,000.
In comparing the sales evidence Mr Nutting argues that the respondent has placed undue reliance upon his Sale 4, and has not sought a reasonable comparison with Mr Nutting’s Parcel 2, which was sold in April 1998 for $62,000, or Parcel 3 which was resold in September 1998 for $65,000. Mr Nutting also notes that Mr Nimmo has actually analysed a total of 25 vacant sales in that whole area, 24 of which were all located to the south of Palatine Street, and only Sale 4 was located north of Palatine Street. Mr Nutting concludes that Mr Nimmo has been unduly influenced by that single Sale 4 in arriving at his new relativities.
In seeking analysis of Sale 4, Mr Nimmo discussed that sale with both the purchaser (who liked the aspect), and the vendor, and concludes that there were no irregularities associated with the sale. He concedes that Sale 4 was the last vacant lot in that part of Sheldon Street, as it had been formerly part of a larger lot, which was later subdivided.
The residual Lot 2 on RP 887272 to the east of Sale 4 has an area of 2,000 square metres and, from the Blinmap supplied, is clearly the best parcel in Sheldon Street at an unimproved value of $98,000, and was purchased as an improved parcel in June 1996 for $325,000. Mr Nutting advises that his advice from real estate agents is that Sale 4 was likely to have achieved a special high price because of its history of development as the last vacant parcel in Sheldon Street. Although, in his discussions with the purchasers, they appeared happy with the sale.
Mr Nimmo also argues that he has only adopted sales of vacant lands in his comparisons, and he would make no allowance for sales of improved properties. He agrees that sales of improved properties in that area may have declined during the relevant period, but argues that it has no bearing upon the determination of the unimproved value of the subject.
In seeking comparison of the subject with Sale 4, Mr Nutting commented that he felt the subject was superior due to its location in the cul-de-sac and its irregular shape. Mr Nimmo does not agree with that comparison arguing that Sale 4 is in fact superior, and he believes it is the most comparable of the sales to the subject, because of its location north of Palatine Street. He sees the area south of Palatine Street as inferior due to its less developed state and less “greening” in that area. Mr Nimmo did not adopt the appellants’ Parcel 1 because of the extent of filling that has been applied to that parcel.
In further support of his case that values have in fact fallen in the area north of Palatine Street, Mr Nutting advises that the adjoining lot to the west of the subject (Lot 23 on RP 225105) was formerly purchased as an improved site in 1993 for $230,000, and is currently on the market at an estimated selling price of $200,000. Such a decline in value, he argues, is also evident in many other improved properties in the area north of Palatine Street.
From his experience he is aware that housebuilding costs have not declined, so he concludes that the value of the land must be declining, and not increasing as suggested by the respondent. Mr Nimmo argues that such comparisons must be treated carefully as it is often confusing to compare replacement costs less depreciation, with the added value that improvements bring to the property. For that reason he uses sales of vacant lands where they are available.
Decision:
(i)Changes in the Unimproved Value –
I note the concern of the appellants that changes in the unimproved value do not appear to be consistent with either opinions expressed by real estate agents, or generalised comments published by a reputable industry organisation such as the Real Estate Institute of Queensland. I can understand that an increase would appear to fly in the face of such evidence. However, when comparing properties for the purpose of determining the unimproved value of the land, one must be careful to ensure that a comparison is made between like matters.
Mr Nimmo has agreed that market indicators for improved properties may well demonstrate a flattening or even decline, in the market for that purpose. But it is his opinion that the most direct method of determining unimproved value is by a comparison of sales of vacant lands, where they are available. In respect of such an approach he has followed the method generally favoured by the courts.
I note for instance in the matter of PH Clough v. The Valuer-General (1981-82) 8 QLCR 70, the Land Appeal Court said at page 76:
“It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value. The reason is obvious. In applying such sales there is no room for error in analyzing the value of improvements. ”
Such an approach was also followed by the Land Appeal Court in NR and PG Tow v. The Valuer-General (1978) 5 QLCR 378, where it said at page 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 over-anxious parties. ”
(See also R and MM Barnwell v. The Valuer-General (1990-91) 13 QLCR 13 at p.17).
In considering the sudden change in the unimproved value I also note that the appellants see the 13% increase as out of line with expectations. However I am reminded that the Land Appeal Court also found in Tow v. The Valuer-General (supra) at p.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. ”
The key to this matter therefore lies not in the nature of the change in the valuation, but rather whether the sales adopted have been reasonably analysed by the respondent. In considering whether the market may have changed during the relevant period, I also note Mr Nimmo’s conclusion that the “Devine estate” to the west of Beaudesert Road is a distinctly different type of market to the area of the subject. While the end product of that estate provides a different, and cheaper range of homesites, it is also likely that, in the broader residential market, there has been some shift in buyer expectations.
Any appraisal of current economic trends in the community, coupled with the outcomes of a shift by government towards economic rationalisation, may lead the observer to conclude that the current home purchasers have an increased level of uncertainty in their expectations for their future. The “Devine estate” developers are likely to have capitalised on that lowering of expectations, and have captured the major part of the market in that area. It would therefore not be totally accurate to conclude that the drop in sales and building activity are not correlated in some way with activities in the “Devine estate”. Such a shift may well have caused a slowing of the “greening” of the area south of Palatine Street, which clearly has had an influence upon Mr Nimmo’s conclusion of the difference in the locality.(ii)Relativity –
In seeking comparison of relativities there would appear to be room for some modifications to the existing unimproved values for Parcels 4, 5 and 6 and also Parcels 7, 8 and 9. Indeed Mr Nimmo agrees that those parcels appear to require some rethinking.
The matter of the change to the relativity between parcels to the north and south of Palatine Street would also appear to be based upon some paucity of sales to the north of Palatine Street. The 24 sales to the south of Palatine Street provide a sound basis for Mr Nimmo’s assessment of those values. However a matter which has weighed heavily in Mr Nimmo’s comparison is his conclusion that the northern area is a better area than the southern area. Mr Nimmo bases this upon his personal opinion using his experience, the amenity of the area as depicted by what he refers to as the “greening” of the lots, and the intrusion of traffic impacts.
While the judgment of an experienced valuer is a legitimate guide to his professional opinion of an area, it is always important to ensure that such judgment is supported by evidence in the marketplace.
This was outlined in the text in “Land Valuation and Compensation in Australia”, Rost & Collins (3rd Edition) 1984, which said at page 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” (page 235/6).
It is always therefore important to contrast the personal views and aspirations of the skilled person in land matters, with the views of the so-called “hypothetical purchaser” in the marketplace. In the end it is the hypothetical vendor and purchaser who establishes the value of land. (See Spencer v. Commonwealth of Australia [1907] 5 CLR 418, where Griffith CJ (page 432) and Isaacs J (page 441) set the principles which have ever since determined how a bona fide sale is 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 marketplace. On the evidence before me I have only Sale 4 to support Mr Nimmo’s conclusion.
The test of that matter lies in the principle outlined in Barnwell v. Valuer-General (supra) where the Land Appeal Court said 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. ”
(iii)Comparison of Sales –
In considering the comparison of comparable sales I note first that Mr Nutting’s Parcel 2 (sold April 1998) and Parcel 3 (sold September 1998) are both sales of vacant land that occurred after the date of issue of the valuation by the Chief Executive on 9 March 1998. I note also that under section 18(2) of the Valuation of Land Act the Chief Executive is required to value any land at the date so fixed, which in this matter is 1 October 1997. Section 52 of the Act establishes that an appellant may appeal a valuation within 42 days from the date of issue of the valuation.
The relevant period for consideration of evidence to support or amend the valuation in this matter is up to and including the date of issue of the valuation on 9 March 1998. After that date any subsequent sales evidence is more properly related to a subsequent valuation. (See KP and RD Weisenberger v. The Valuer-General (1978) 5 QLCR 125; and RG McMurray v. The Valuer-General (1983) 9 QLCR 35 at page 36).
Subsequent sales are not necessarily excluded from the comparison, but the appellant would need to establish that the circumstances surrounding those sales have not changed, from those existing at the relevant period up to 9 March 1998. It is likely therefore for the sales of Parcels 2 and 3 to be afforded a lesser weight in any analysis. Guidance is found in McCathie and Others v. Federal Commissioner of Taxation [1944] 69 CLR 1, where Williams J said at page 16:“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 the 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 v. Commissioner of Land Tax (1943) 7 “The Valuer” 299, at p.304; and also in Federal Commissioner of Taxation v. Harris (1980) 30 ALR 10 at p.18. (See also 37 FLR 325). However in Harris, Fisher J noted at page 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.
In analysing Mr Nutting’s Parcel 1 I note that there were certain improvements involving fill to the site at the time of the sale, and there has been no considered opinion as to the extent of added value of that fill. On that basis I place little weight upon the sale of Parcel 1.
That then leaves the four sales of Mr Nimmo, three of which (Sales 1, 2 and 3) are not challenged by the appellants. However the remaining Sale 4 is perhaps the key to this whole matter. It is Mr Nutting’s argument that Sale 4 represents the last sale in the street, and accordingly attracts some special value as a consequence of its restricted competition. Mr Nimmo argues that there was no evidence to suggest that the purchaser had paid too much for Sale 4, or that the vendor had not achieved his expectation. On the surface Sale 4 would appear to pass the Spencer test for a prudent buyer and seller.
However in considering whether a restricted market for Sale 4 (the last lot), played any part in achieving an inflated price, I seek guidance in Brewarrana Pty Ltd v. Commissioner of Highways, SA (1973) 32 LGRA 170 where Williams J said at page 179-180:
“It is general valuation practice for sales characterized as comparable sales to be used as bases for the valuation of lands said to be similar. But allowances must always be made before such sales can be so used. No two parcels of land are identical in all respects: the sale price of any given piece of land is not necessarily the price at which it ought to have been sold, or the same thing as its true value. Before using any allegedly comparable sale, therefore, the valuer must consider whether, having regard to the circumstances (using that word in its broadest sense) appertaining to the parcel of land in question, and to the transaction of sale, there are sufficient similarities to the circumstances appertaining to the subject land and to the notional sale presupposed by the test formulated in Spencer v. The Commonwealth of Australia and in later cases to warrant a court’s reasoning from the sale price paid under the allegedly comparable sale, with or without other evidence, to a value for the subject land…..there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. It is, in my view, all a matter of degree: some adjustment is always necessary; too much adjustment will render it unsafe to use as a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method. Just where the line is to be drawn is, it seems to me, the very sort of question that is fit for the expert valuer to determine; the assessment of the risks of adjustment is peculiarly within his sphere of skill.”
The key to a thorough analysis of Sale 4 lies in fully understanding “in its broadest sense” the similarities to the circumstances relating to the subject land. While Mr Nimmo has no doubt considered the physical attributes of Sale 4, it would be appropriate also, in Mr Nutting’s opinion, to consider the state of the market at the time of that sale. The test for Mr Nimmo to apply is whether the price paid for the last lot in the street represents a comparable fair price to what the subject might bring if it had been the last lot for sale in that area.
Afterall, the price that a prudent purchaser would pay for Sale 4, should be no more than what he would pay rather than to lose the sale. Under the principle of supply and demand it is logical that, as the supply of lots in the area diminishes, then the price is likely to increase to a point where a prospective purchaser would then move to another area, rather than pay the price asked by the vendor. In the end the price paid, under normal circumstances, represents what it is worth to both parties. As Sale 4 was purchased in an open market then it is reasonable for Mr Nimmo to assume that it represented fair market value at the date of sale.
The question that must also be asked then is whether that sale represents a fair comparison to all the surrounding parcels north of Palatine Street. In seeking a comparison of the subject with Sale 4 there are two factors to be considered by Mr Nimmo. Firstly, there is the relative weighting of the physical features of the surrounding parcels (the relativity), and secondly, there is the quantum of value that Mr Nimmo has applied to Sale 4.
If I consider the relativity between Parcels 7, 8 and 9 it is agreed by Mr Nimmo that there is some room for possible adjustment of the current values. As noted in Barnwell (supra) it is appropriate to maintain proper relativity unless there is no sound basis for that relativity. In the current matter the parties have agreed that there may be some doubt about the reliability of the current relationships between those parcels. On that basis I believe there is some room for compromise.
If I also look at the relativity between Parcels 4, 5 and 6 Mr Nimmo agrees that the $7,000 difference between Parcel 4 and Parcels 5 and 6 would appear to be excessive. The inference was that Parcel 4 could perhaps have a lower unimproved value than its current $76,000.
Likewise if I examine the relativity between the subject ($69,000) and the surrounding parcels Lot 23 to the west ($69,000), and Lot 20 to the north-east ($75,000), I find that Parcel 23 adjoins a park (Lot 40), and does not have an access strip to a rear parcel along its boundary as does the subject. On that basis there could be some rethinking of the relative unimproved values of those two parcels. However the lot to the north-east (Lot 20) also suffers the same access strip along its boundary as the subject, yet it has an unimproved value of $75,000. The shape and access to both the subject and Lot 20 are similar, although Lot 20 has a slightly higher elevation. On balance relativity between Lot 20 and the subject appears appropriate.
In considering the quantum of the valuation of Sale 4 applied by Mr Nimmo, I note that he has sought to apply Sale 4 at a conservative figure of $77,000, or 90% of the sale price of $85,000. Such an approach follows the principle established by the High Court in Commissioner of Succession Duties (SA) v. Executor Trustee and Agency Company of South Australia Limited and Others (1946-47) 74 CLR 358, where Dixon J said at page 373:
“I have had the advantage of reading the judgment prepared by Williams J and agree in it. I should like, however, to add for myself that there is some difference of purpose in valuing property for revenue cases and in compensation cases. In the second the purpose is to ensure that the person to be compensated is given a full money equivalent of his loss, while in the first it is to ascertain what money value is plainly contained in the asset so as to afford a proper measure of liability to tax. While this difference cannot change the test of value, it is not without effect upon a court’s attitude in the application of the test. In a case of compensation doubts are resolved in favour of a more liberal estimate, in a revenue case, of a more conservative estimate.”
However in coming to any conclusion I am reminder by Ms Watt that it is not within the powers of this Court to probe the fairness or correctness of the respondent’s unimproved values. Indeed section 33 of the Valuation of Land Act specifically dictates to the contrary. That principle was followed in BT Dillon v. Valuer-General (1986-87) 11 QLCR 231, where the Land Appeal Court said at page 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.”
The need to demonstrate that the Chief Executive has made some error in method or calculation was established in Brisbane City Council v. The Valuer-General (1977-78) 140 CLR 41, where Gibbs J said at page 56:
“In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s. 13(7) is rebutted.” (now section 33).
However in seeking to prove their case the appellants are restricted to the grounds of their appeal under section 45(4) of the Act which states:
“45.(4). Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner.”
If I consider the three relevant grounds of the notice of appeal, I find that Ground (6) seeks to place the onus of proof upon the respondent, contrary to the directions of the Act. Likewise Ground (7) of the appeal seeks to require the respondent to provide reasons why the unimproved value has increased, or why the objection was refused.
As noted previously it is not the task of the respondent to justify his actions, either in setting the original unimproved value or in deciding to reject the objection. While it would usually be a sound method of good communication between the parties for the respondent to explain something of the background to the valuation, it is not a requirement of the Act. However the evidence of Mr Nimmo is that the appellants were given the normal correspondence to parties in these matters, they were given the opportunity to ask questions during the objection conference, and they have been given information to assist them to understand the process. On that basis I find no fault by the respondent on either Ground (6) or (7).
If I examine the remaining Ground (1) I find that the only basis to the appellants’ case is that the property market has been static for the relevant period. The respondent has sought to demonstrate the actual state of the market for comparable sales of vacant lands in that area, by the method preferred by the courts and in fact personally did a manual re-evaluation of the area.
Summary:
In the end, while I believe that there is some room for a fresh evaluation of the relativities, particularly surrounding the subject, the appellants have not adequately proved that the respondent has applied a wrong principle, or made a serious error.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 in the sum of $69,000 is affirmed.(NG Divett)
Member of the Land Court
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