Pfeffer v Department of Natural Resources and Mines
[2003] QLC 62
•4 September 2003
LAND COURT OF QUEENSLAND
CITATION: Pfeffer v Department of Natural Resources and Mines [2003] QLC 0062 PARTIES: Helmut and Mary Claire Pfeffer
(applicants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO:
AV2002/0253
DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 4 September 2003 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER Dr NG Divett ORDER: The appeal is dismissed, and the unimproved value of Lot 2 on RP 61092 as determined by the Chief Executive in the sum of Sixty Three Thousand Dollars ($63,000) is affirmed. CATCHWORDS: Valuation – Sales evidence – Comparable sales APPEARANCES: Mr H Pfeffer for the appellants
Mr A Cradick senior legal officer appeared for the respondent.
Background:
This matter relates to land at 1737 Sandgate Road, Virginia and is located about 9.5 kilometres north-east of the Brisbane Central Business District. The subject land is described as Lot 2 on RP 61092, Parish of Toombul, and has an area of 885 m². The land is about 100 metres from the Virginia Railway Station. Access to the subject land is via a bitumen sealed turning land which provides for vehicles turning left from Sandgate Road into Gympie Street, which is about 40 metres south of the subject land. There is concrete kerbing and channelling, and access to the subject land is via a small concrete culvert over an open stormwater drain which is parallel to Sandgate Road and the sealed pedestrian footpath. The subject land is zoned as Low Density Residential Area LR, under the Brisbane City Plan 2000, effective at the date of valuation at 1 October 2001. The key issues are the nature and location of the land, impacts of traffic and associated noise, access to convenience shopping, changes in the value and comparison of sales.
On 26 February 2002 the Chief Executive issued a valuation of the subject land at $63,000. Following an objection the Chief Executive confirmed that figure on 25 June 2002. The appellants have now appealed, claiming the unimproved value should more properly be $50,000.
Helmut Pfeffer appeared and gave evidence for the appellants. Mr A Cradick, senior legal officer appeared for the respondent, calling evidence from Andrew Trevor Brown, the departmental registered valuer responsible for determining the valuation.
The History of the Valuation –
Mr Pfeffer confirms that the appellants had appealed against the previous valuation of the subject land at 1 October 1998, (AV99-276, 3 November 2000, unreported). He confirms that on that occasion the Court determined an unimproved value of $57,000. However Mr Pfeffer argues that due to changing circumstances now evident in that locality, the unimproved value of the subject land should now be reduced to $50,000. He disagrees with the current increase of 10% in the unimproved value to $63,000 over the last two years. Mr Brown disagrees that values along busy Sandgate Road have declined since 1998, noting that surrounding areas near Sandgate Road had increased by 30% to 40%, while the immediate area adjoining Sandgate Road had only increased by 10%.
Mr Pfeffer agrees that the onus to prove his case falls upon the appellants in this matter, and relies upon further explanations of the various impacts now affecting the subject land. He provides no sales evidence to support his conclusions. Mr Brown acknowledges many of the features evident at the subject land, but argues that they are similar to those considered previously by the Court, and those disabilities have been allowed for in the valuation at $63,000. Mr Brown agrees that properties along busy Sandgate Road have increased in value at a lesser rate than the surrounding areas; but argues that his sales evidence supports that such land still did increase in value at the time of the valuation at 1 October 2001.
The Nature of the Land –
It is agreed that the subject land falls gently to the rear from Sandgate Road, and has an irregular shape with a frontage to Sandgate Road of about 22 metres, and narrowing to the rear. There are five adjoining properties, and it is not contested that roots from trees on adjoining properties provide a constant problem for the appellants. Mr Pfeffer advises that he regularly has to treat his underground pipes with a root control tablet costing about $10 every two months. Mr Brown does not contest that problem, and advises that an appropriate allowance for that disability was included in the previous Court’s decision, and has been retained in the current valuation.
In his assessment of the valuation Mr Brown has placed some reliance upon the relative close proximity of the subject land to the adjoining railway stations. Mr Brown advises that his current market research indicates that preference for public transport is now gaining increasing acceptance, particularly for what is seen as the more reliable electric train commuter services. He agrees however that motor vehicles continue to remain the predominant transport medium for City commuters. However he notes that particularly with inner suburbs out to about 10 kilometres from the City CBD, there is a growing acceptance of train services. To meet that growing demand Queensland Rail is now improving vehicle parking facilities at selected station sites. He notes that such improvements are now evident at the Nundah Railway Station, which he argues is conveniently located only 1 kilometre from the subject land along Gympie Street.
Mr Pfeffer disagrees that Northgate Railway Station is a viable alternative destination from the subject land, although he agrees it is the last stop for express trains to the City. Mr Pfeffer notes that if the travelling time to Northgate Station is allowed for, then there would be little advantage to him compared to departing from the Virginia Station, which also has ample car parking facilities. However he concedes that the trains are more frequent from Northgate.
Another matter of concern to the appellants is the apparent decline in local convenience shopping near the subject land. Mr Pfeffer agrees that there are still some local shops in Sandgate Road on the western side between Jefferis Street and Prince Street, about 100 metres from the subject land. However he notes that those current local shops have a more restricted range of convenience goods, reflecting mainly fish and chips, and second hand goods. Mr Brown argues that the subject land is conveniently located from more selected shopping at Nundah Village (2 kilometres), Toombul Centre (3 kilometres) and Chermside Shopping Centre (3 kilometres). It is agreed that the Nundah Village Shopping Centre is currently undergoing major redevelopment, with the stated objective of creating a major “café precinct”.
Other matters of concern to the appellants include traffic congestion and noise along Sandgate Road, and construction noise during the development along the railway line to the north-east of the subject land. It is also agreed that the Virginia Overpass across the railway line is just north of the subject land. There was also undocumented occurrences of street and railway vandalism, and unlawful entry of the subject land, and repeated noise and nuisance from rowdy neighbours who are tenants of the property immediately adjoining the subject land to the north. Mr Pfeffer advises that the police regularly monitor that property, but there has been no respite from those problems.
However with the view of retaining reasonably workable neighbourhood relations, the appellants have declined to escalate the problems by formally complaining to authorities. The problems have continued in spite of a change of ownership of that property, and several changes of tenants. Mr Brown accepts those problems and advises that they were evident at the previous valuation at 1 October 1998, and their continued existence has been allowed for in the current valuation. Claims of disruption to electricity supply, and general threats of violence were not supported by evidence that those incidents were more prevalent than exists in other urban areas, and add little to any argument for further reduction in value for those reasons.
Other problems for the appellants relate to traffic problems along the turning lane in front of the subject land. It is noted that there is a bus stop in front of the subject land for the local Virginia Primary School, which is immediately across Sandgate Road. That bus stop occupies about half of the frontage of the subject land, and regularly is an obstruction to entry to the subject land as buses temporarily stop for passengers. There have also been several occasions each year where heavy trucks use the turning lane to stop and seek to rectify vehicle problems. Collectively those stoppages add to the lack of unencumbered access to the subject land. However those occasions merely reflect problems that are often regularly encountered in front of other properties that front busy Sandgate Road. The occurrence of the third turning lane on that otherwise very busy road is probably the reason why drivers seek safety from the passing traffic, when checking their vehicles. Sandgate Road is two lanes travelling north and two lanes travelling south at the subject land, plus the turning lane into Gympie Street.
Mr Pfeffer also notes that he has observed that some drivers tend to use the turning lane to pass slow moving traffic in the centre lanes of Sandgate Road. He further advises that there had been a fatal traffic accident at the traffic lights at the Gympie Street intersection. He sees those traffic lights as a nuisance to the subject land due to the increased traffic noise associated with the intermittent stopping of heavy traffic flows. Northbound vehicles seeking entry to Belmore Street to the north of the subject land, must turn right into Gympie Street, and then left into St Vincent’s Road and then into Belmore Street. That further increases traffic flows at the Gympie Street intersection.
Mr Cradick summarises the position of the respondent by arguing that all of the matters raised by the appellants were previously considered by this Court, and the Chief Executive has made an overall allowance of $10,000 to cover any disabilities so arising. However he notes that while the subject land is in the suburb of Virginia, it actually adjoins the more prestigious suburb of Northgate. For that reason he sees that its locality is reasonably comparable with other close by areas such as Wavell Heights.
Comparison of Sales –
Mr Pfeffer concedes that he generally does not closely follow the property market, and he provides no direct alternative sales to support his estimate of the unimproved value of the subject land. He argues that it is very difficult, if not impossible, to accurately determine the unimproved value without a sale of the subject land itself. However he concedes that generally market values in Brisbane have increased over the last five years. Mr Pfeffer does not generally disagree with Mr Brown’s analysis of his sales evidence, but argues that those sales are not truly comparable, as they are generally located in more prestigious suburbs. Mr Pfeffer has not personally inspected any of those sales.
Mr Brown explains that he initially undertook his valuation of the subject land by comparing all sales of vacant lands in the general area. He has subsequently become acquainted with a fifth sale of vacant land at Boondall, which he now seeks leave under r.23 of the Land Court Rules to provide support to his previous determination. Mr Brown provides the following sales to support his valuation:
· Sale 1 – (236 Shaw Road, Wavell Heights – Lot 15 on RP 25032). This is a Low Density residential vacant parcel of area 405 m² and located about 2.1 kilometres south-west of the subject land. The sale has restricted access to busy Shaw Road which carries heavy traffic flows, but not as busy as Sandgate Road. The sale is more removed from access to the railway stations, at about 3 to 4 kilometres, and also has parking problems with peak hour traffic along Shaw Road. There is a “No Parking” sign in front of the sale. The sale is above street level and falls towards Shaw Road. The sale is seen to be superior in location and access to a less busy road, and is overall slightly superior to the subject land, although it is only about half the size of the subject land. The sale sold in August 2001 for $95,000, was analysed at $91,000, and applied at $88,000 (97%).
· Sale 2 – (164 Rode Road, Wavell Heights – Lot 1 on RP 135289). This is a 549 m² Low Density residential parcel formerly developed as a night tennis court, and located about 2 kilometres south-west of the subject land. The sale is on the busy corner of Rode Road and Shaw Road with traffic backing up along Shaw Road outside the sale. The sale is also about 3 to 4 kilometres from the railway station at Northgate. The sale is in a slightly elevated position, regular in shape and is nearly level. It is smaller in size, but in a superior location, and is seen as slightly superior overall to the subject land. The sale sold in April 2001 for $99,500, was analysed at $104,500 after allowing for demolition of the old improvements, and applied at $104,000 (99%).
· Sale 3 – (Katora Street, Wavell Heights – Lot 171 on SP 137083). This is a 367 m² Low Medium residential vacant parcel located about 1.2 kilometres south-west of the subject land. That part of Wavell Heights is seen as slightly inferior to the areas south of Hamilton Road in other parts of Wavell Heights. The sale adjoins an electricity substation, and slopes sideways from east to west, and also towards the road from the rear. The sale is about 3 kilometres from the Northgate Railway Station, and 2 kilometres from Virginia Station. The sale is in a slightly superior location, and is in a quieter area not impacted by busy Sandgate Road. Although smaller in size, the sale is seen as overall slightly superior. The sale sold in May 2001 for $90,000, was analysed at $85,000, and applied at $74,000 (87%).
· Sale 4 – (1597 Sandgate Road, Nundah – Lot 14 on RP 34516). This is a 405 m² Low Density residential parcel improved with a dwelling and landscaping. The sale has access to a side access lane off Sandgate Road, which restricts movements by heavy vehicles. The sale is 0.5 kilometres nearer to the City CBD, and about 0.5 kilometres south of the subject land. The sale has similar services, but is further removed from Virginia Railway Station. Parking along the narrow access lane also restricts access to the sale. The narrow frontage of the sale also restricts development. The sale slopes gently from Sandgate Road, but is more elevated than the subject land. The sale sold in August 2001 for $126,500, was analysed at $69,700, and applied at $52,000 (75%). The sale is seen as inferior due to its smaller size.
· Sale 5 – (2323 Sandgate Road, Boondall – Lot 10 on RP 95490). This is a 607 m² Low Density residential vacant parcel located about 5 kilometres north of the subject land, and about 14.5 kilometres north-west of the City CBD. The sale has similar services to the subject land, but is further removed from the railway station. The sale has a 5 metre less frontage than the subject land. The sale slopes gently from Sandgate Road, but has access directly on to the two lanes of Sandgate Road, and has no separate access service road, which is therefore inferior to the subject land. Overall the sale is seen as inferior due to size, access and further location from the City CBD. The sale sold in August 2001 for $65,000, was analysed at $63,000, and applied at $50,000 (77%).
Mr Brown further advises that subsequent to the sale of his Sale 1, the neighbour to the north had marketed the land adjoining to the north as suitable for subdivision into two parcels fronting Edinburgh Castle Road, rather than the two parcels fronting Shaw Road. That has now occurred, and Sale 1 has two neighbouring parcels overlooking that sale, which detracts from its privacy. However Mr Brown argues that his Sales 1 and 2 demonstrate that even properties fronting busy roads have increased in value over recent times. He notes that Sale 1 has increased in value by 30% at the relevant date of valuation at 1 October 2001. Mr Brown is very familiar with that area as he personally resides close by to Sales 1 and 2. Mr Brown is not specific, but advises that even parcels directly fronting onto busy Sandgate Road are now reselling for higher prices than paid for not long ago.
In respect of his Sale 2 Mr Brown makes no allowance for that parcel being on a corner, as he advises that the market does not now signify any premium for corner influence on residential properties. Mr Brown agrees that if either his Sales 1 or 2 were larger in size, then both would be far superior to the subject land, as Shaw Road is not as busy as Sandgate Road. In respect of his Sale 4 he advises that sale is only about 200 metres from traffic lights at Sandgate Road and Hamilton Road intersection, and it experiences similar traffic impacts as does the subject land. Mr Brown also agrees that direct access to the subject land is only available to south moving traffic, while direct access to Sale 5 is only available to north moving traffic.
Mr Brown however concedes that Sale 5 is closer to two local shopping complexes about 90 metres to 150 metres north at the intersection of Sandgate Road and Roscommon Road. He also agrees that Sale 5 would have good access to the Taigum Shopping Centre; which is about the same distance as from the subject land to either Toombul or Chermside Shopping Centres. However he argues that the further location from the City CBD at Sale 5 was a key matter in its comparison with the subject land, in spite of the higher elevation of Sale 5. Mr Brown also advises that sale prices in the areas around Virginia are superior to the areas of Sale 5 at Boondall.
In explaining his analysis of the improved Sale 4, Mr Brown has applied the industry standard unit construction rates for dwellings of that class in Rawlinsons Guide for 2000. He concluded a replacement cost of $650 per square metre for the dwelling, which he then depreciated by 20% to reflect its age and condition. As he saw his Sale 4 as a supporting sale, he applied a conservative application of 75% to his analysed value to arrive at an unimproved capital value of Sale 4 at $52,000. He advises such an approach allowed for any uncertainties in determining the unimproved value of the dwelling improvements.
In explaining why he had only applied a conservative application of 87% to his Sale 3, he advises that was the first sale in that area for several years, and a conservative application of Sale 3 ensured any marginal interpretation in consistency in that sale was balanced in the appellant’s favour. He advises that the higher applications of Sales 1 and 2 reflected the greater number of other comparable sales in the area near those sales.
Mr Brown agrees that Sale 3 has a zoning of Low Medium density. However, because of its small size of 367 m², and after discussions with the purchaser who bought the land for the purpose of a single residence only, he concludes that its highest and best use is for that purpose, and it had been valued accordingly under s.17(1) of the Act, with no allowance made for any higher potential use under the different zoning.
Mr Cradick agrees that Mr Brown has allowed in his valuation for the larger area of the subject land compared to the sales, but he argues that size is only one of the factors that had been considered in those comparisons.
Decision:
I note first that the matter of the nature of the land, and disabilities affecting its value, were broadly considered by this Court in its previous decision of 3 November 2000. I note also that an allowance for those disabilities has continued to be made by the Chief Executive to an amount of $10,000, and that is included in the current valuation at $63,000. The question then to be addressed is whether the changing circumstances, if any, have now altered the impact of those disabilities, to the extent that a further deduction should be allowed in the valuation.
In understanding the legislation as it applies to the current matter, I note that the previous decision in this matter explained the intentions of s.3(1) as it defines unimproved value; s.17(1) as it defines a valuation for a single dwelling house; and s.33 which directs that unless proved wrong, then the valuation of the Chief Executive is deemed to be correct. I will not repeat those directions of the law.
Changes in Services to the Land –
While I accept Mr Brown’s advice that public preferences for public transport to the City CBD may be leaning towards commuter rail, I also agree with Mr Pfeffer that such inclinations can be overemphasised in considering the market value of a parcel of land. I believe it would be likely that Northgate Railway Station would be a preferred transit location in that area. However I agree with Mr Pfeffer that, for the subject land, a more suitable rail transit destination was likely to be at the Virginia Railway Station. But this then should not be overestimated as the predominant transport medium appears to remain the private use of motor vehicles. On that basis I believe it is important not to overestimate the convenience to the railway line. However I also note that the sales and the subject land also have ready access to public bus routes.
If I look then at convenience to shopping, I accept that all sales and the subject land have convenient vehicle access to major shopping centres in that locality, and on that basis are directly comparable. I also accept Mr Pfeffer’s advice that the local convenience shopping near the subject land in Sandgate Road, would appear to provide a different range of convenience services. But that tends to be the nature of local shopping, and is generally driven by public demand for certain types of convenience services. On that basis I see no reason to conclude that a prudent purchaser would see that as a major disadvantage in the marketplace.
The matter of whether the turning lane in front of the subject land provides some advantage or disadvantage to access to the subject land is a matter for reflection. Those matters were considered previously, particularly the matter of the bus stop in front of the subject land. While I accept that there would be some inconvenience on the few occasions that a heavy vehicle was temporarily parked in that turning lane, that must be balanced against the alternative of having to directly enter the busy through traffic lanes in the absence of that turning lane. On balance I see the turning lane as a positive rather than a negative impact. The impacts of the stopping of vehicles at the Gympie Street traffic lights has been allowed for by Mr Brown.
It is also agreed by Mr Brown that the subject land does fall within a separate market segment involving lands fronting busy Sandgate Road. He has specifically provided a smaller increase to such areas (10%), compared to the surrounding areas (30%). The difference between the parties on that issue is only whether Sandgate Road properties have actually increased in value, or declined in value over the relevant period. To ascertain that trend I turn to the sales evidence.
Comparison of Sales –
Before considering the sales evidence I look to court precedents for guidance in respect of what might be seen as the value of land. I note this has long been guided by the decision of the High Court of Australia in Spencer v The Commonwealth of Australia (1907) 5 CLR 418where Griffith CJ said at p.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, ie whether there was in fact on that day a willing buyer, but by inquiring ‘What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?’ It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.”
That was further clarified by Isaacs J in that matter who said at p.441:
“To arrive at the value of the land at that date, we have, as I conceive, 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.”
Those two passages clearly define the test which this Court must take. I am also aware that, as noted in the previous decision on this matter at p.7, the Land Appeal Court in Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327, at p.330, directed that residential properties are valued on a site value approach. On that basis the actual size of a parcel is only one of the features to be considered in making any comparisons.
If I summarise Mr Brown’s comparisons with his sales I find the following:
SaleArea Applied Value Comparison
1405 m² $88,000 Slightly superior
2549 m² $104,000 Slightly superior
3367 m² $74,000 Slightly superior
4405 m² $52,000 Inferior
5607 m² $50,000 Inferior
Subject land 885 m² $63,000 -
The key sales are really Sales 1, 2 and 5 as they reflect vacant parcels located on busy roads. While Sale 3 is also a useful comparison, it does not suffer from comparable traffic problems on a busy road. Sale 4 also provides some assistance, but it has the difficulty of having to ascertain the appropriate added value of the dwelling improvements. The benefits of comparing sales of vacant lands was clarified in the matter of PH Clough v Valuer-General (1981-82) 8 QLCR 70, where the Land Appeal Court said at p.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.
Because there is less room for difference of opinion as to value of the various items of improvement and comparison is thus simpler, it has been held that highly improved sales should be avoided in preference to sales comprising a lesser degree of improvement.”
I accept that Wavell Heights is a superior overall location to Virginia, although I accept that the subject land is virtually separated from most of Virginia by Sandgate Road and the railway line, and has a close affinity to the adjoining Northgate, which is also a more attractive suburb. However I note that Mr Brown has made some adjustment for the comparisons of the much smaller size of Sales 1 and 2 compared to the subject land, which is nearly twice the size of those two parcels. The comparison with Sale 5 gives a closer allowance for size, but Sale 5 is much further removed the City CBD, and its lower applied value of $50,000 reflects that locality. On balance I believe Mr Brown’s comparisons are reasonable.
Summary:
In summarising this matter I therefore find that Mr Brown has not made any factual error or followed a wrong conclusion in his valuation. That point was made by the High Court in the matter of Brisbane City Council v The Valuer-General (1977-78) 140 CLR 41, where Gibbs J said at p.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 section 13(7) is rebutted.”
Section 13(7) as it then was is now s.33 of the Valuation of Land Act 1944.
In exercising their right of appeal in this matter, the appellants have not expunged their onus of proof as required under s.45(4) of the Act, which says in respect of a notice of appeal:
“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.
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 of Lot 2 on RP 61092 as determined by the Chief Executive in the sum of Sixty Three Thousand Dollars ($63,000) is affirmed.
NG DIVETT
MEMBER OF THE LAND COURT
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