Pfeffer v Department of Natural Resources and Mines
[2005] QLC 59
•13 December 2005
LAND COURT OF QUEENSLAND
CITATION: Pfeffer v Department of Natural Resources and Mines [2005] QLC 0059 PARTIES: Helmut & Mary C Pfeffer
(appellants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO: AV2005/0422 DIVISION: Land Court of Queensland PROCEEDING: An appeal against an annual valuation of land under the Valuation of Land Act1944. DELIVERED ON: 13 December 2005 HEARD AT: Brisbane DELIVERED AT: Brisbane MEMBER: Mr RS Jones ORDERS: 1. The appeal is dismissed.
2. Pursuant to section 66 of the Valuation of Land Act 1944 the unimproved value of Lot 2 on Registered Plan 61092, Parish of Toombul, County of Stanley is determined in the amount of $125,000.
CATCHWORDS: s.33 Valuation of Land Act 1944 rebuttal of presumption of correctness of statutory valuation – onus of proof – no sales evidence provided by appellants – new and higher valuation contended for by the Chief Executive – Section 66 of the Valuation of Land Act1944. APPEARANCES: Mr H Pfeffer, in person for the appellants
Mr M Heather (Senior Legal Officer), Department of Natural Resources and Mines, for the respondent
Background
This appeal concerns land located at 1737 Sandgate Road, Virginia, more properly described as Lot 2 on Registered Plan 61092, Parish of Toombul, County of Stanley. The land is located approximately 10 kilometres radially north east of the Brisbane Central Business District. The Virginia railway station and Brisbane City Council bus stop locations are within 100 metres of the subject land which is also within walking distance of the Virginia State Primary School and local neighbourhood shops. More significant shopping facilities including Westfield at Chermside and the Toombul Shopping Centre are located approximately 3 kilometres away. All the other usual urban services and amenities are available.
The land is of an irregular shape narrowing towards the rear and comprises an area of 885 square metres. The land has frontage to Sandgate Road of approximately 23 metres and lies between Belmore Street and Gympie Street, Virginia. In the vicinity of the land, Sandgate Road is a five lane bitumen sealed arterial carriageway carrying significant volumes of traffic. The land is designated "Low Density Residential Area LR" under the Brisbane City Plan 2000 which allows for the construction of a single detached dwelling of up to two storeys in height and, consistent with that designation, improvements on the land comprise mainly of a private residential dwelling.
The appellants appealed the respondent's assessment of the unimproved value of the land determined as at 1 October 2004 (effective as at 30 June 2005) which had originally been assessed in the sum of $114,000. The appellant's estimate of the unimproved value of the land is $95,000.
Notwithstanding the unimproved value as originally struck by the respondent, when this appeal came before me on 21 November 2005, the valuation report tendered by the respondent[1] assessed the unimproved value in the amount of $125,000.
[1] Exhibit 3 (Valuation of Mr M Olive).
The appellants were represented by Mr H Pfeffer in person. The respondent was legally represented by Mr M Heather, a senior legal officer employed by the respondent and relied on the evidence of Mr M Olive, a registered real estate valuer also employed by the respondent.
Issues in the Appeal
As the subject land is "improved land" for the purposes of the Valuation of Land Act 1944 (VLA), ss.3(1)(b) and s.3(2) of that Act are relevant and provide:
"3(1) For the purposes of this Act –
Unimproved value of land means –(a) …
(b)in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.
"(2)However, the unimproved value shall in no case be less than the sum that would be obtained by deducting the value of improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this Act."
Pursuant to s.33 of the VLA the valuation appealed against is deemed to be correct and therefore the appellants bear a burden of proving that it is wrong. Further, pursuant to s.45(4), the burden of proving every ground of appeal relied on also lies with the appellants.[2] In BrisbaneCity Council v The Valuer-General[3] Gibbs J, as he then was, in delivering the leading judgment of the High Court considered that the presumption in favour of the correctness of the statutory valuation may be rebutted where it can be shown that the valuation was based on a wrong principle and/or involved a significant error of fact and/or was made by a fundamentally erroneous method.
[2] See also s.56(2).
[3](1977-78) 140 CLR 41 at 56-57: See also G Cominos & Co v Chief Executive, Department of Lands (1996-97) 16 QLCR 311 at 331-332 (LAC).
The Presumption of Correctness
Sections 33 and 45 (4) of the VLA are of particular relevance in this appeal. That is so because of the case run by the respondent. In what I consider to be rather odd circumstances, the respondent relied on valuation evidence which did not support the valuation appealed against but rather a higher figure. And, in what I understood to be the respondent's primary case, it was contended that if the appellants failed to satisfy the burden of proof prescribed by s.45(4) of the Act then the valuation appealed against ($114,000) should stand as a consequence of the statutory presumption of correctness provided for in s.33. The second limb of the respondent's argument was to the effect that if the evidence led by the appellants was sufficient for me to find that the presumption of correctness had been rebutted, then I should find that the correct valuation was $125,000 and not $114,000 or $95,000.
For reasons which ought become clear later herein I am of the view that the appellants failed to satisfy the burden of proof imposed upon them pursuant to s.33 and s.45(4). However, I do not accept that pursuant to s.33 it then follows that the original valuation must continue to be presumed to be correct. In AMP Life Limited & Ors v Department of Natural Resources and Mines[4] the learned Member Mr Scott, in considering of the operation of s.33 made the following observations:
"[26]…Suffice it to say at this point that the proof required by s.33 in an appeal is proof sufficient to lead the Court to exercise its jurisdiction and to determine a value different from the value which to that point is deemed to be correct. The Chief Executive cannot by an act such as an admission displace the jurisdiction of the Court in such circumstances where the Court is properly seized of the matter. Once an appeal is correctly lodged the Court is seized of the matter.
[27]Once valuation evidence is given by both sides, the Court must consider the factual issues and draw its own conclusion with respect to them. In such circumstances the Court considers the totality of the evidence (State Government Insurance Office v Valuer-General (1981) 7 QLCR 171 at 193-194) and the presumption of law raised by s.33 generally fades into insignificance…"
[4] unreported decision of the Land Court; [2002] QLC 099 at [26] and [27]; see also [51].
I agree with these observations. It seems to me to be quite clear that where the totality of the evidence is sufficient for me to be persuaded, on the balance of probabilities,[5] that the valuation is wrong then the presumption must be rebutted. It does not matter that the evidence fatal to the operation of the presumption comes from the respondent and nor does it matter that the appellant's evidence on its own was not sufficient to displace the presumption of correctness
[5]Helton v Allen (1940) 63 CLR 691 at 712 per Dixon, Evatt and McTiernan JJ: Miller v Minister of Pensions (1947) 2 All ER 372 at 374 per Denning J.
In this appeal the valuation evidence was largely all one way. Mr Heather conceded that there was no probative evidence before me supporting the correctness of the original valuation appealed against. In fact Mr Heather went so far as to concede that the respondent, relying on the evidence of Mr Olive, would contend that the valuation of $125,000 was the correct assessment of the unimproved value of the land.
I should also point out that as far as I can see there is no statutory prohibition which prevents the respondent from contending, on the hearing of an appeal such as this, for a valuation figure higher or lower than the one originally assessed, objected to and eventually appealed against. In reaching this conclusion I have had the benefit of reading Mr Scott's decision in the AMP[6] case referred to above and, while agreeing with the relevant conclusion reached by the learned Member, I also generally agree with the reasoning leading to that conclusion.
[6] see at paras [18] and [36] to [48].
The Unimproved Value of the Land
In their Notice of Appeal the appellants articulated their grounds of appeal in the following terms:
"Ongoing excessive noise and stalled repairs to the footpath and roadworks in front of our property".
The evidence of Mr Pfeffer gave me the impression that the major noise sources affecting the land were the traffic on Sandgate Road and the rail traffic and maintenance activities occurring on the busy Petrie/Caboolture railway line. Other noise sources included noisy neighbours, passing rowdy youths and garbage collection activities at the nearby bus stops. Mr Pfeffer also gave evidence of the unsatisfactory condition of the footpaths and roads in the vicinity of the land and the ingress and egress problems associated with the land. Unfortunately however the appellants provided no sales evidence that supported their assessment of the unimproved value in the amount of $95,000 or contradicted Mr Olive's assessment of the unimproved value of the land. It is well established that the best evidence for determining a basis for the assessment of unimproved value is evidence of sales of comparable land and particularly sales of vacant or lightly improved land.[7]
[7]W & T Fischer v The Valuer General (1983) 9 QLCR 44 at 46 (LAC); H & E Grahn v The Valuer General unreported decision of the LAC, 20 November 1992 (AV90/472, AV90/473).
Mr Olive in his valuation exercise originally had regard to five nearby sales. However, out of a concern that his sale 4 might have had some adjoining owner influence, Mr Heather submitted that no regard should be had to that sale as evidence of value. The absence of this sale does not, in my view, affect the accuracy of the valuation exercise carried out by Mr Olive. In his report (exhibit 3), Mr Olive also identified that at the time of preparing his report for the hearing of this appeal he had only some 2½ years experience as a registered valuer. As it turned out, when he originally valued the land he had only some 1½ years experience. During the course of the evidence of Mr Olive it also became apparent that there were some errors in his report.
Notwithstanding Mr Olive's relative inexperience and the corrections which had to be made to his report, all of which I accept were minor and of no real significance, I found Mr Olive to be an impressive witness. Mr Olive clearly identified that traffic and rail noise would detrimentally affect the value of the land. At page 2 of exhibit 3 the following entries are made:
"Road:Sandgate Road is four-lane, bitumen sealed arterial carriageway with concrete kerbing and channelling carrying a large volume of traffic. As the name implies, the road links the inner city with Brisbane's northern Bayside suburbs including Sandgate…
Nature of Land: The site is irregular in shape becoming narrow towards the rear, with an approximate frontage to Sandgate Road of 23 metres. There is a gentle fall from Sandgate Road to the rear of the property. As with other properties in the immediate vicinity, the subject is affected by significant noise and pollution emanating from Sandgate Road as well as the nearby rail line." (emphasis added)
There was no serious challenge to the sales evidence relied on by Mr Olive and I am satisfied that, in reaching his valuation of $125,000, Mr Olive had regard to reliable sales evidence, including two lightly improved sales on Sandgate Road, which he properly analysed and applied in his valuation exercise. I am also satisfied that in reaching his assessment of the unimproved value of the land he had proper regard to the matters and circumstances raised by Mr Pfeffer in his evidence.
For the reasons canvassed above, I have reached the conclusion that the appellants have failed to prove that the respondent's assessment of the unimproved value should be reduced to $95,000 or at all.
Accordingly, the appeal must be dismissed.
This leaves the issue of what is the unimproved value of the land as at the relevant date? Mr Olive gave evidence to the effect that the figure of $114,000 had been the product of a "mass appraisal" exercise. I understood this approach to involve a broad brush value determination method not involving an individual assessment of the unimproved value of a particular lot having regard to comparable sales evidence. It was also Mr Olive's evidence that when he undertook a more detailed valuation of the land it was apparent that the original figure involved an underestimation of value.
Having regard to the totality of the evidence before me I have reached the following further conclusions.
i.the valuation appealed against in the sum of $114,000 involved either a significant error of fact or was arrived at by a fundamentally flawed method. In any event, on the evidence it was clearly wrong.
ii.Accordingly, the presumption in favour of the correctness of the valuation appealed against prescribed in s.33 of the VLA is rebutted.
iii.The best evidence supports an unimproved value of the land is the sum of $125,000.
One outcome of an appeal such as this is that the amount of the statutory valuation appealed against may be increased, this is expressly provided for in s.66 of the VLA which states:
"Order of court
Upon an appeal under section 55 the Land Court or, upon the rehearing of any such appeal, the Land 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 deems fit with respect to the payment of costs."
In the circumstances of this appeal, the evidence and the conclusions I have reached based on that evidence, lead me to having to determine the unimproved value of the subject land as at 1 October 2004 to be $125,000.
Before making the consequential orders and without intending to imply any criticism of the conduct of the respondent in this appeal, I feel I should indicate that I consider the result to be a most unfortunate outcome for the appellants. In circumstances such as this it would not be unreasonable, at least up until receipt of the valuation report intended to be relied on by the respondent at trial, for an appellant to expect that the contest would be against the actual valuation figure appealed against. Even upon receipt of the report, unless accompanied by clearly worded correspondence, an appellant might still be confused about which figure he or she has to deal with at the hearing of the appeal and the ramifications of continuing with the appeal in the face of a valuation higher than that appealed against. Such confusion would be in my view a highly undesirable result. I would also take this opportunity to endorse the concerns expressed by Mr Scott in the AMP[8] case where the learned Member identified some undesirable dilemmas an appellant might be confronted with in such circumstances.
[8] at para [53].
Orders
The appeal is dismissed.
Pursuant to section 66 of the Valuation of Land Act 1944 the unimproved value of Lot 2 on Registered Plan 61092, Parish of Toombul, County of Stanley is determined in the amount of $125,000.
R S JONES
MEMBER OF THE LAND COURT
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