Preston v Chief Executive, Department of Lands

[1995] QLC 63

[1995] QLC 63

 

  LAND COURT

BRISBANE

28 JULY 1995

Re:     Appeal against a valuation
Valuation of Land Act 1944
  Brisbane City Council - South Brisbane
  AV94-538

Russell Preston
  v.
  Chief Executive, Department of Lands

D E C I S I O N
           This is an appeal against the determination of the Chief Executive, Department of Lands, of the unimproved value of Lots 22 and 23 on RP 11740, Parish of South Brisbane, in the sum of $115,000 for the purposes of the annual valuation of the area as at 30 June 1993.  The appellant is contending for an unimproved value of $85,000 based on grounds which in substance are directed towards the submission that the increase in the value of the lot cannot be sustained on increases shown by statistics of sales of house prices throughout the area of Brisbane. 
           The subject lot (as one lot) is a rectangular shaped parcel containing 809m² and is situated at 17 Colton Street, Highgate Hill.  The land is zoned "Residential B", however, the site is improved and used for single-unit residential purposes.  It follows under the provisions of s.17 of the Act that the land must be valued as having no higher and better use than as a single-unit residential site.  The site has all relevant services available and is described as possessing a steep cross-fall from south to north along Colton Street.  Urban views are obtainable to the north.
           In the evidence of Mr Preston he could find no particular disabilities affecting the site, nor could he advance any particular characteristics enhancing its value as a single-unit residential site.  He also referred matters going to the notice of the valuation and objections to the valuation.  This material, however, has no relevance as the function of the Court is limited to ascertaining value at the relevant date subject to the provisions of s.45 of the Act.  The matter thus turns simply on the question as to the unimproved value of the lot at the relevant date.  Unimproved value in this context is market value -

"Now, what he (the valuer) has to consider is what the land would fetch as at the date of the valuation if the improvements made had not been made.  Words could scarcely be clearer to show that the improvements were to be left entirely out of view.  They are to be taken, not only as non-existent, but as if they never had existed ..... what the Act requires is really quite simple.  Here is a plot of land; assume that there is nothing on it in the way of improvement, what would it fetch in the market?  It will be observed that the value is not what has been sometimes designated by the expression `prairie value'.  The land must be taken as it exists at the date of valuation."  Toohey's Ltd v. The Valuer-General (1925) A.C. 439 P.C. See Also Stubberfield v. The Valuer-General (1988-89) 12 QLCR 328 (Full Court) at p.330.

In a valuation of this kind, it is common to find that evidence from the market for single-unit residential sites is limited.  Further, as is evident in this case, there may exist substantial differences with respect to lot size for which the valuer and the appellant have to consider.  This last matter is one raised by Mr Preston - double the size does not mean double the value.  Mr Ian Smith, property valuer in the employ of the Department, who gave evidence in support of the determined value agrees, given that all other factors of comparability are equal.
           In speaking about increases in value, Mr Preston went to statistical information gathered from sales of lots over the area of the City of Brisbane.  He referred to an article contained in the "Weekend Australian" of 20 August 1994 and to statistics published by the Real Estate Institute.  These latter statistics contain some break-up between suburbs.  For the years 91/92 and 92/93 in the suburb of Highgate Hill, one vacant land sale is shown at $120,000.  Nothing is known about the sale and nothing can therefore be made of it.  For improved sales Mr Preston has calculated the statistics reveal an increase of about 6%.
           The fallacy of this approach is that the comparisons are not like with like and this, in my opinion, is reflected in the evidence of Mr Preston when he seems to argue that sales of unimproved land in an old established suburb such as Highgate Hill are rare and thus carry an inherent premium for scarcity.  The argument may well be self-defeating when speaking about the value of a commodity - in this case land.
           Mr Smith gave evidence of three sales, one of which is reasonably close to the subject land.  The sale lot is situated at 7 Ambleside Street, West End, containing 382m².  The land is zoned "Residential B" but because of its size cannot be developed for that purpose.  The lot sold in February 1993 for $75,000 and since sale has been developed for single-unit residential purposes.  After allowing $2,000 for clearing and $1,100 for fencing, the sale reflected an unimproved value of $71,900.  The value applied to the site for rating purposes is $66,000.  The sale land is described as being within a mixed industrial/residential environment.  The remaining two sales are of "Residential A" land situated in the suburb of Buranda.  The sale lots are of 405m² and 455m² (s.2 and 3).  Sale 2 in Leonard Street sold for $75,000 with clearing and fencing.  Sale 3 in Fern Street sold for $56,500 with clearing and fencing.  Sale 3 has had a home put upon it.  Sale 2 has remained vacant and in August 1994 (first sale May 1993) sold for $90,000.  No reliance is placed on this later sale as evidence of value in 1993.  It does, however, speak to the question of the weight which can be given to the broad use of statistics for individual valuation purposes.
           Reflection upon the evidence reveals that the valuers of the Department, including Mr Smith, in applying the market evidence have not approached the application of the evidence in an arbitrary fashion and, whilst there is a suggestion by Mr Preston that the matter of size of the subject lot with the sales and with smaller lots referred to by him in the vicinity of the subject lot does not constitute a reasonable appreciation, I must lean in favour of the professional opinion which has not been tarnished in any way in cross-examination.
           Accordingly, the appeal is dismissed and the determination of the Chief Executive is affirmed.

DM WHITE
  PRESIDENT OF THE LAND COURT