Quadrell v Department of Natural Resources and Mines
[2003] QLC 34
•22 May 2003
LAND COURT OF QUEENSLAND
CITATION: Quadrell v Department of Natural Resources and Mines [2003] QLC 0034 PARTIES: Albert P Quadrell
(applicant)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO: AV2002/0230 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 22 May 2003 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER Dr NG Divett ORDER: The appeal is dismissed. The unimproved value of Lots 1 and 2 on RP 94300 as determined by the Chief Executive in the sum of Two Hundred and Five Thousand Dollars ($205,000) is affirmed. CATCHWORDS: Valuation of unimproved value – Comparison of sales – Use of sales of vacant lands – Valuation of Land Act 1944 APPEARANCES: Mr AP Quadrell for the appellant.
Mr GJ Smith for the respondent
Background:
This matter relates to land at 1 Tees Street, Yeerongpilly and described as Lots 1 and 2 on RP 94300, Parish of Yeerongpilly. The subject land has an area of 1,358 m² and is located about 6 kilometres radially south of the Brisbane Central Business District. The subject land is at the cul-de-sac end of Tees Street, which is bitumen sealed with concrete kerbing and channelling. All normal urban utility services are available. The land is zoned Low Medium Residential area under the City Plan 2000, effective at the date of valuation of 1 October 2001. The key issues are the nature of the land, traffic disabilities, comparison of sales and relative changes in the value.
On 25 March 2002 the Chief Executive issued a valuation of the subject land at $205,000. Following an objection the Chief Executive confirmed that figure on 25 June 2002. The appellant has now appealed claiming the unimproved value should more properly be $150,000; although he agrees that he determined that figure prior to knowledge of the actual market level in the area.
Mr Albert Patrick Quadrell appeared and gave evidence for the appellant. Mr GJ Smith, Legal Officer appeared for the respondent, calling evidence from Peter Michael O’Donovan the departmental registered valuer responsible for determining the valuation.
The Nature of the Land –
Mr Quadrell advises that he has been a long time resident on the subject land for in excess of 40 years, and he agrees that it is generally a pleasant environment. However he argues that of recent time the development of new multi-units to the western side of Tees Street, immediately south of the subject land, has now had a significant impact upon the amenity of the area. As a result of that new development he advises that not only is parking virtually impossible outside the subject land, but the placement of his rubbish bins for collection can only occur well removed (about 50 metres) from the front of the parcel. He notes that because of two trees and overhead electricity and telephone wires near the subject land, the residents have been advised to leave their rubbish bins at the southern end of Tees Street.
In respect of the redevelopment of the units in Tees Street, Mr Quadrell provides a sketch plan showing the location of the vehicle driveways, which he argues now severely restrict parking in the street (Exhibit 2). It is agreed that vehicle driveways have not changed on the eastern side of Tees Street during the last year. However Mr Quadrell advises that the two previous single entry vehicle driveways on the western side to the former residents (Quinn), were now replaced with two major concrete multi-entry driveways to two duplex units. While the number of entry points has remained at two, the width and scope of those entry driveways has increased significantly. He argues that those wider entry “No Parking” areas severely restrict parking or placement of rubbish bins for collection purposes.
In respect of Mr O’Donovan’s technical report and description of the nature of the subject land, Mr Quadrell agrees with its general thrust for the subject land, but disagrees with Mr O’Donovan’s comparisons with the sales evidence. It is agreed that there is a sewer line along the western boundary of the subject land, passing then across Tees Street in front of the subject land. The sewer line gravitates from south to north, and is shown on a Brisbane City Council Bi-map (Exhibit 3). However that plan shows the manhole near the south-west corner of the subject land, and the sewer line across Tees Street, as abandoned, and presumably no longer in use. In any case it is agreed by both parties that because of its location about half a metre from the side boundary, the sewer line is not a major disability. However Mr Quadrell notes its presence means that a prudent owner would be aware that maintenance by the Council at some time could be a possibility.
In respect of the general nature of the subject land, it is agreed that the two parcels (Lots 1 and 2) are to be treated under s.17 of the Valuation of Land Act 1944 as a single residence site. The land falls gently towards the west, and is generally level. Mr Quadrell advises that during heavy rain fall there is some local surface water run-off as the surrounding land falls gently to the west to the river, as far north as School Road. Mr Quadrell notes that vehicle parking within the subject land is difficult during wet weather. However he agrees that it is not a significant problem on the subject land.
Another problem for Mr Quadrell is the presence of noise from both the close by Fairfield Road, and also the parallel railway line about 75 metres to the west of the subject land. The railway line is the direct access to the Port of Brisbane, and major goods services pass 24 hours a day, particularly during sleeping hours. He advises that there are no noise buffer barriers along the railway line in the near proximity to the subject land.
There are also two lavatory blocks with a cement parking area on the adjoining church hall site to the west of the subject land. However Mr Quadrell agrees that those structures do not present a problem, although, like other residential buildings, they do restrict views to the west.
Changes in the Valuation –
It is also of concern to the appellant that the large increase in the unimproved value of the subject land is inconsistent with economic statistics provided by government sources. To support that conclusion he provides a series of schedules of percentage changes in property prices (Exhibit 2). However Mr Quadrell concedes that the statistics he provides were merely collected from the Internet, and he is unable to substantiate their accuracy, or the total source of the data.
In summarizing those statistical indices, Mr Quadrell notes that the percentage change in median house prices reflected increases of 18.4% in Brisbane City overall, and only 4.3% in Yeerongpilly for the year 2002. Mr Quadrell notes that the unimproved value of the subject land has increased by 9.9% (1999) 19.7% (2001) and 40.4% (2002). Mr Quadrell also notes that even subsequent to the current valuation, the unimproved value increased a further 39% in 2003.
Mr O’Donovan advises that over the last two to three years the values in the Yeerongpilly area have risen significantly, reflecting increases in sales of vacant lands. He advises further that those large increases are in line with similar increases throughout the inner suburbs of Brisbane, extending out 6 to 8 kilometres from the City centre. He advises that trend is continuing, and will increase even further in the next valuation.
The Method of Valuation –
Mr O’Donovan advises that he has valued the subject land under s.17 of the Valuation of the Land Act 1944 as a single unit residence site. Under that definition he has considered the subject land as a large site, where only a single residence can be built. Any comparisons made have therefore been concluded with similar comparable parcels for a similar use. He notes that any higher use for the subject land, as a consequence of its larger size, has been ignored in the valuation.
Comparison of Sales –
Mr Quadrell provides no sales to support his estimate of the unimproved value of the subject land. Mr O’Donovan provides the following sales of vacant parcels:
· Sale 1 – (12 Wattle Avenue, Yeerongpilly – Lot 8 on SP 124637). This is a 664 m² Residential A battleaxe parcel located about 400 metres south-east of the subject land. The sale is more elevated than the subject land, and much smaller in area. Because of its restricted battleaxe access, shape and size, the sale is seen as inferior to the subject land.
The sale sold in June 2001 for $160,000, was analysed at $150,000, and applied at $146,000 (97%).
· Sale 2 – (42 Wylma Street, Holland Park – Lots 18 and 19 on RP 13247). This is a 809 m² Residential A parcel located about 4.4 kilometres north-east of the subject land. The sale has superior elevation and falls gently from the road, and is smaller than the subject land, but is in a superior local environment. There are also potential neighbourhood views from the sale, which overall is seen as superior to the subject land. The sale sold in June 2000 for $220,000, was analysed at $222,000 after allowing for demolition of an existing structure, and applied at $217,500 (98%).
· Sale 3 – (21 Biarra Street, Yeerongpilly – Lot 2 on RP 133355). This is a 400 m² Residential BR3 parcel located about 160 metres south of the subject land. The sale has a slightly superior elevation and falls gently from the road. The sale is substantially smaller and is seen as inferior to the subject land. The sale sold in November 2000 for $137,000, was analysed at $139,000 after allowing for demolition costs, and applied at $155,000 (111%), due to its earlier date of sale about 1 year prior to the date of valuation.
Mr Quadrell provides no direct conclusion about the comparability of any of the three sales, but argues that, in his opinion, they all have better frontages than the subject land, and are not truly comparable. Mr Quadrell is familiar with the Wattle Street Sale 1, and agrees that it is nearer to busy Ipswich Road, but argues that it is more removed from Fairfield Road and the railway line. The 21 Biarra Street Sale 3 has similar proximity to the railway line as the subject land. Mr O’Donovan agrees that there would be more noise at the subject land because of the rail traffic. Mr Quadrell also notes that the Wylma Street Sale 2 is in a much superior locality, and to his knowledge has panoramic views of the City from the new dwelling upon that site.
Mr O’Donovan disagrees that views of the City centre are available from Sale 2, but agrees that there are good neighbourhood views from that parcel, although he admits that he has not been inside the new dwelling subsequently constructed. Mr O’Donovan explains that City views involve the Central City buildings, compared to normal neighbourhood views of the suburban streetscape. Mr Quadrell bases his opinion upon his knowledge of views from his friends’ home in nearby Sackville Street, about 300 metres north-west of the subject land, although Mr Quadrell has also not been inside 42 Wylma Street.
In respect of potential views from Sale 3 (21 Biarra Street) Mr Quadrell is aware that views of the City centre were previously available from the adjoining dwelling, and have subsequently been obstructed by the new dwelling on Sale 3. He therefore reasonably concludes that those City centre views are now available from 21 Biarra Street. Mr O’Donovan doubts that City views are available from 21 Biarra Street, but concedes that other lots in Biarra Street do have City views. Mr Quadrell advises that prior to the construction of units behind the subject land, he had direct City centre views from that parcel, which is just north of Sale 3 (21 Biarra Street). Sale 3 is also about 8 or 9 metres higher in elevation than the subject land.
In seeking comparisons in respect of parking or difficulties with the collection of rubbish bins, Mr O’Donovan agrees that Sale 2 (42 Wylma Street) and Sale 3 (21 Biarra Street) are both superior in that aspect. However he argues that because of its battleaxe shape, Sale 1 (12 Wattle Street) has very restricted parking in the street fronting that parcel, and in his opinion, is inferior to the subject land. Mr Quadrell argues that parking outside adjoining residences in Wattle Street would be available, unlike in Tees Street where the number of driveways is more restrictive. Mr O’Donovan concedes that opinion, but argues that parking within the parcel itself would be available at both Sale 1 (12 Wattle Street) and the subject land.
In respect of whether Sales 2 and 3 might have City centre views, Mr O’Donovan believes that even if the views were better than he was aware from his inspections, other sales in the area still support the valuation of the subject land. Mr O’Donovan has chosen a selection of the available sales in preparing his report. He advises that if he had thought that the selected sales did have City centre views, then he would not have used them, as he acknowledges that the subject land does not have City centre views. For that reason he had rejected two other sales in Biarra Street because of the presence of City centre views from those parcels. He advises that he had selected Sale 2 (42 Wylma Street) because it was the only sale of vacant land in that area of a larger size. He agrees that there is a substantial difference in the sale price of lands where a larger area is available for a single residence.
Decision:
I turn first to the legislation and note that in adopting a method of comparing sales only for single residence sites, Mr O’Donovan has followed directions of s.17(1) of the Valuation of Land Act 1944 which states:
“17.(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made.”
The result of that direction is that single residence property owners are afforded a level of concession compared to other larger parcels which could have some higher value for another purpose.
The Nature of the Land –
If I look then at the impacts upon the subject land as a consequence of parking and other restrictions in Tees Street, I find that Mr O’Donovan has in fact allowed for those disabilities, noting in particular the presence of the subject land at the head of the cul-de-sac. His use of Sale 1 (12 Wattle Street), which is a battleaxe parcel with similar disabilities, acknowledges that fact. On balance I believe that the valuation approach taken by Mr O’Donovan has sought to allow for the problems inherent on the subject land. I also note that while the noise from the railway line is agreed to be greater at the subject land, Mr O’Donovan was aware of that fact.
Changes in the Valuation –
While Mr Quadrell concedes that his statistical evidence of market changes lacks some weight in respect of credibility of the reliability of the figures, its existence as public information upon the Internet lends some support to his concerns about the accuracy of the unimproved value of the subject land. While I am aware that such percentage rises in values are often of concern to appellants in seeking to have confidence that their personal property has been fairly treated in any valuation, they in fact do not prove conclusively that any error has been made in the valuation process. Such rises may, at best, be an indicator to owners that they should further investigate the valuation, but there are many reasons why a valuation has changed at what would appear to be a rate out of line with some overall statistical percentage.
This matter has been considered many times by the courts, and I note from precedents that a large increase in itself is not evidence of some error in the valuation. I note, for example, in the decision of NR and PG Tow v Valuer-General (1978) 5 QLCR 378, where the Land Appeal Court said 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 real test is not the percentage increase in the unimproved values, but a comparison of the subject land with sales of comparable sites in the vicinity of the subject land at the time of the valuation.
Comparison of Sales –
I move then to what is the real measure of the reliability of the valuation. I know first that in seeking comparable sales of vacant lands Mr O’Donovan has followed guidance established by the courts over many years. That principle was followed in WM and TJ Fischer v Valuer-General (1983) 9 QLCR 44, where the Land Appeal Court said at p.46:
“It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence.”
The matter of comparable sales of vacant lands was also followed in R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13, where in considering how such sales are to be assessed, the Land Appeal Court said at page 18:
“It remains for us to consider the proposal that the subject valuation is excessive when looked at from a value per unit area (per square metre) point of view. It again is well established that when valuing home sites, then the best method of comparison is on a site to site basis. Mr Skinner, using this method, proceeded in the valuation of the subject land, and no criticism of it on that basis is justified.”
The reason why a site to site comparison is to be adopted, was perhaps best clarified in the decision in Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327 where the Land Appeal Court said at p.330:
“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. As the Land Appeal Court said in its decision on the appellants’ previous appeal (H and E Grahn v. The Valuer-General, AV89-246 and 247, 13 December 1990):
‘for the purpose of valuing residential sites, the preferable method of comparison is on a site to site basis and not on the basis of a unit area valued comparison. Site for site comparison should take into comparison such matters as the size of the lots, the situation of and access to the lots, the shape and topography of the lots etc. and comparisons on a unit area basis do not necessarily reflect valuation considerations for the above features.’”
If I look then at the only sales evidence provided I find the following comparisons:
Sale Area Applied Value Comparison 1 (12 Wattle Street) 664 m² $146,000 Inferior 2 (42 Wylma Street) 809 m² $217,500 Superior 3 (21 Biarra Street) 400 m² $155,000 Inferior Subject land 1,358 m² $205,000 - On those comparisons there is nothing to indicate that Mr O’Donovan has made an error in his valuation.
If I look for some guidance in respect of Mr O’Donovan’s application of those sales, I note that he has applied his Sale 3 (21 Biarra Street) at $155,000, or 111% of the analysed value, to reflect his opinion that that sale is an old sale in a rising market. His evidence was that for the last two to three years the market in Yeerongpilly has risen significantly. However I note that in applying his Sale 2 (42 Wylma Street) he applied that unimproved value at only $217,500, or 98% of the analysed value. But that sale was also an old sale in June 2000, and before the date of sale of 21 Biarra Street. On that basis it could be concluded that Mr O’Donovan has made a conservative estimate of the impact of Sale 2 (42 Wylma Street) in determining the market level in the area at the relevant date. It is also noted that Mr O’Donovan’s use of Sale 2 (42 Wylma Street) was to provide some guidance on the potential impact of the larger size of a parcel in the market place.
Summary:
In summarizing this matter I am reminded that in respect of a notice of appeal, s.45(4) of the Act directs:
“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.”
I am also reminded that unless it has been proved that the Chief Executive followed a wrong principle or made a serious error of fact, then the onus of proof is not discharged. That was directed by the High Court of Australia in 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 Act which states:
“33. Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.”
On the above evidence the appellant has not expunged that responsibility in the current matter.
Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellant has proved his case. The appeal is dismissed. The unimproved value of Lots 1 and 2 on RP 94300 as determined by the Chief Executive in the sum of Two Hundred and Five Thousand Dollars ($205,000) is affirmed.
NG DIVETT
MEMBER OF THE LAND COURT
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