Rauchle v Department of Natural Resources and Water
[2007] QLC 28
•20 April 2007
LAND COURT OF QUEENSLAND
CITATION: Rauchle v Department of Natural Resources and Water [2007] QLC 0028 PARTIES: Guy Rauchle
(appellant)v. Chief Executive, Department of Natural Resources and Water
(respondent)FILE NOS: AV2005/0933, AV2005/0935 and AV2005/0934 DIVISION: Land Court of Queensland PROCEEDING: Appeals against Annual Valuations under the Valuation of Land Act 1944 DELIVERED ON: 20 April 2007 DELIVERED AT: Brisbane HEARD AT: Gatton MEMBER: Mr PA Smith ORDERS: 1. Appeal AV2005/0933 is dismissed.
2. Appeal AV2005/0935 is dismissed.
3. Appeal AV2005/0934 is dismissed.
CATCHWORDS: Valuation - factors in valuation - presumption in favour of correctness of valuation - valuation methodology - Valuation of Land Act 1944 APPEARANCES: Mr G Rauchle appeared on his own behalf
Mr W Isdale (Crown Law) for the respondent
Background
These three appeals concern land located about 34 km south of Gatton on the bitumen sealed Blackduck Creek Road in the locality of the Junction View School. The land is conveniently broken up in the following ways: Lot 154 on CC3072:TL214539 and Lot 161 on Crown Plan CH312141, comprising an area of 65.486 ha; Lot 161 on Crown Plan CH312141, Parish of East Haldon, comprising an area of 64.75 ha and Lot 154 on CC3072:TL214539, Parish of Haldon, comprising an area of 0.736 ha. The shape and dimensions of the land are conveniently shown in the valuation report of Mr O'Connor[1]. As regards Lots 154 and 161 (AV2005/0933), the Chief Executive's valuation is $152,500 and the appellant contends for a valuation of $63,000. As regards Lot 161 (AV2005/0935), the Chief Executive's valuation of $150,000 was reduced, pursuant to s.68 of the Valuation of Land Act 1944 (VLA), on 13 October 2005 to $100,000. The appellant contends for a valuation of $62,750. As regards Lot 154, the term lease land (AV2005/0934), the Chief Executive's valuation is in the sum of $17,600 and the appellant contends for a valuation of $248.
[1] Ex 6 and Ex 7
The appellant self represented. Mr Rauchle has no legal or valuation qualifications. He gave evidence on his own behalf. The respondent was represented by Mr Isdale of Crown Law and relied on the evidence of a registered valuer, Mr D O'Connor.
Relevant Legislative Provisions
Pursuant to s.13 of the VLA, the respondent is required to determine the unimproved value of the land. Relevantly, s.3(1) of the VLA says as follows:
“3.(1) For the purposes of this Act –
‘unimproved value’ of land means –
(a) in relation to unimproved 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; and
(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."
I note that the subject land in this matter is improved. Accordingly, put simply, the task is to find the market value of the land on the assumption that none of the improvements are on the subject land. An assessment is then undertaken as to the highest and best use of that land.
As the President said in Fairfax v Department of Natural Resources and Mines [2005] QLC 0011 at paragraphs [11] and [12]:
"[11]The principles for determination of the 'market value' of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 441).
[12]It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that:
'Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but – as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales.'"
I respectfully agree with these observations.
Presumption of correctness of valuation
I now turn to s.33 of the VLA, which states as follows:
"33 Status of valuation
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."
This section was considered by the High Court in the case of Brisbane City Council v The Valuer-General for the State of Queensland 1977-78 140 CLR 41 where Justice Gibbs (as he then was) made the following observation 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."
It should be noted that s.33 of the VLA is in essentially the same terms as what was then s.13(7) of the Act.
The Issues in the Appeal
The nature of these appeals is somewhat unusual given the length of time that the appellant took in submitting his case, both in oral evidence and in cross-examination of the respondent's valuer, Mr O'Connor. Additionally, the appellant has provided very lengthy written submissions to the Court. In the last paragraph of submissions by Mr Isdale in reply to the appellant's lengthy submissions, Mr Isdale had this to say:
"At paragraph 83 on page 32 the appellant refers to his inexperience. While this may go some way towards explaining, it does not excuse the demeaning tone of his submissions which, I submit, the Court should censure in order to protect the dignity of the Court."
To attempt to go through every point made by the appellant at the hearing and in his submissions would be a very lengthy and, in my view, at the end of the day, futile exercise. In saying this, I do not doubt in any way the sincerity of the views held by the appellant, nor his desire to comply with all requests made by the Court. In my view, the appellant attempted at all times to conduct himself properly before the Land Court. However, the fact that the appellant may have attempted to conduct his case properly at all times, does not necessarily mean that he succeeded in doing so. The appellant's written submissions are littered with examples of statements and contentions which either miss the point or are irrelevant and, to use the words of Mr Isdale, could be construed as demeaning to the Court. Perhaps the contentions of the appellant, and the manner in which he has run his case, are best summarised by the following extracts from his written submissions:
"14.With reference to the intercept, Mr Isdale seeks to extrapolate beyond the reasonable range of reliability to the incredible in order to discredit the credible. A simple analogy will clarify the error of Mr Isdale's argument. Water finds its own level and, across a reasonable distance, this is considered a straight line. Extrapolating beyond the reasonable leads to the conclusion that the earth is flat. On the other hand, if the earth is conceded to be spherical, then the surface of water is a curved line. The conclusion then is that water does not find its own level and anything based on this principle is in error. Accordingly, it must be concluded that the court can gain no benefit from this line of questioning.
….
16.In regard to this and to the suitability of presenting the evidence to either his peers or the court, Mr Isdale has made repeated statements with which the witness has disagreed. Without exploring the witness' justification for disputing these statements or otherwise providing evidence to discredit the witness' response, the witness' response should be viewed credibly - expert or otherwise. In summarizing Mr Isdale's efforts I paraphrase Lewis Carrol (From The Hunting of the Snark:) 'What I tell you three times is true.' Mr Isdale's assertions must be treated as a fiction no less than Alice in Wonderland.
…
32.The possible effect of bias from preconceptions of outcome on the objectivity of any form of research undertaking is well documented. Objective methodologies and objective research tools, such as statistics are preferred to guard against the influence of bias. The process of deriving a valuation is essentially a research undertaking. It generally employs subjective methodologies and consequently, is particularly prone to bias. The potential for bias is greatest when a researcher seeks to validate a previously derived conclusion. The influence of preconception is reinforce by a personal attachment to the previous outcome that can be further strengthened if personal issues such as credibility are also attached to the previous outcome.
….
42.…. By Mr O'Connor's assertion, if a man with one arm were to buy a piano, he should get a 50% discount and a person who can't play the piano at all should be given it for nothing. Statements by Mr O'Connor during cross-examination (T p116 L23) indicate he has insufficient knowledge to make an assessment of their value. Mr O'Connor has acted on a wrong principle and included a serious error of fact in his analysis.
….
68.Mr O'Connor's evidence is riddled with inconsistencies, omissions and errors in fact - some so significant that individually, they cast serious bout on the integrity and credibility of his evidence. The number of errors, alone, is sufficient to create significant doubt. His analysis lacks objectivity and it has been shown that: he has acted upon a wrong principle, that there are errors in law and that the methodology employed is fundamentally erroneous. I submit hat it is also reasonable to conclude, by virtue of bias (see para 32), that Mr O'Connor's independence is questionable.
….
71.Mr Isdale has submitted that my conduct as an expert witness be assessed against the standard forwarded by Mr Jones in the decision on Perpetual Trustee and quoted herein at paragraph 23. I submit that Mr O'Connor fails in fulfilling his duties and responsibilities as an expert witness.
72.To paraphrase Oscar Wilde, Mr O'Connor is 'quite exploded' (Oscar Wilde, The Importance of Being Earnest). I submit that no weight at all should be given to Mr O'Connor's evidence. If not already rebutted by a finding of the Court on my submission at paragraph 31 herein, I further submit that the statutory presumption of correctness in favour of the respondent has been disturbed, in accordance with my conclusions at paragraph 68 and the criteria established by authority at paragraph 28 (both herein).
….
74.Mr Isdale, in his closing submission (T p142 L27) states:
In order to successfully challenge the evidence of the expert valuer, it would be necessary, in almost all cases, to have another qualified witness who is able to express a different opinion based on sufficient expertise and knowledge.
In considering Mr Isdale's comment, I submit to the Court that, on balance of probabilities, a rank odour omitted from a fish factory is from rotting fish. The court would not require my assessment as a waste management expert to reasonably reach this conclusion. In the same way, the case for the respondent is protected by a thin façade provided by statutory advantage and the illusion of propriety created by 'expert' testimony. Once the facade is scratched, it is plain to see that the case stinks like rotting fish."
It is apparent from the passages quoted above that the appellant has little regard for either Mr Isdale or Mr O'Connor. I accept Mr O'Connor as an expert witness before this Court and also note his long career as a registered valuer. In my view, the one point at issue which the appellant has successfully challenged Mr O'Connor on, that being whether the subject land is either 4 km or approximately 1 km from a nearby school, a point conceded by Mr O'Connor, hardly justifies the level and ferocity of attack that the appellant has launched on Mr O'Connor. I accept Mr O'Connor's valuation evidence and all of the analysis contained within his valuation reports, save the reference to the distance of the subject land from the school.
It would indeed take many pages of detailed analysis to sift through and provide comments on each of the contentions raised by the appellant. Again, I repeat that in my view the appellant honestly holds the views expressed both in his evidence and in his written submissions and, despite the manner in which they have been presented, he has not set out deliberately to be disrespectful to the Court. Given the fact that I accept in virtual totality the expert evidence of Mr O'Connor, that necessarily means that I reject the bulk of the evidence of the appellant and his submissions with respect thereto.
As I have indicated, given the nature and content of many of the submissions made by the appellant, I do not intend to deal with them further in these reasons. Further, I wish to emphasise that I have very carefully read all of the material provided by the appellant and gone over all of his evidence and his submissions in order to distil out facts and circumstances which, based on the VLA and decided precedents, may assist the appellant. Unfortunately, the appellant's lack of understanding of legal principles and lack of expertise in valuation results in little useful information remaining. I will make one specific reference to the appellant's material to emphasise this point.
Using his own words, the appellant submits as follows:
"d.It has been asserted that there exists a relationship between changes in market value and changes in unimproved value and that, in the first instance, these changes occur at about the same proportion (see para 13, exhibit 4). Paragraphs 1.a - 1.c establish initial and closing market values for the valuation period and, by applying the same proportion, the change in unimproved value can be determined. This has not specifically been refuted by the respondent.
e.A graphical/statistical analysis (see paragraph 14 and attachment l of exhibit 4) has been undertaken to support the assertion made in paragraph 1.d. As such, the case being made does not stand or fall upon the credence given to this analysis. The respondent strongly disputes the analysis and has made a concerted effort to discredit this evidence. The matter of this evidence will be examined further (see 11-18 herein)."
The "graphical/statistical analysis" referred to by the appellant above is one of the cornerstones of his case. As words cannot adequately describe the appellant's analysis, the analysis, which is attachment l of exhibit 4, is reproduced below as follows:
I have read with great interest the decision of Dr Divett of the Land Court in the case of Estate of the Late Clare Mahon v Chief Executive, Department of Main Roads[2] referred to by the appellant. I find it virtually unfathomable that the appellant can construe the decision by Dr Divett as supporting his statistical analysis. The case of Mahon concerned a claim for resumption for road purposes under the Acquisition of Land Act 1967. The parties were each represented by experienced counsel and each called evidence from a registered valuer. On my analysis of Dr Divett's decision, the landholder's valuer made specific reference to 16 sales in support for his contentions as to value, whilst the respondent's valuer referred specifically to 11 sales, two of which were common with the claimant's sales. In Dr Divett's words[3]:
Both Mr Payne and Mr Horrigan have used the method of direct comparison of sales in order to arrive at their determinations. However in undertaking that comparison they have assumed an entirely different approach to assessing the highest and best use of the subjects.
" From his analysis of recorded sales Mr Payne has concluded that properties purchased by the respondent were reflecting a slightly higher value in comparison to the rural homesite market. As he is required to determine the value for their highest and best use, he concluded that use to be for sale to the acquiring authority. He also concluded that, because of the public perception of uncertainty within the zone of influence of the new road scheme, the only purchaser likely to acquire the subject would be the respondent.By comparison Mr Horrigan saw the highest and best use of the subjects as for rural residential purposes, and compared the parcels with sales for that purpose. He also discredited any use of settlements by the respondent in view of uncertainties associated with such sales. He claims, where 'arms length' normal transactions occur, particularly of vacant lands, then those are the best evidence of value. In those circumstances he maintains that it is not appropriate to consider the use of settlement agreements by a constructing authority. He further supports his conclusion by noting that in arriving at his valuation he must disregard any influence upon the value by the proposed roadworks."
[2] Land Court Brisbane, 2 October 1998 (AV97-77)
[3] At p5 and p6
As one would expect, Dr Divett in his decision undertook a very careful analysis of all of the sales referred to by the registered valuers and applied legal principles to those sales. This is completely removed from the manner in which the appellant in this case has taken a small quote from Dr Divett's decision and attempted to use same in support of his "graphical/statistical analysis". The appellant's use of the short quote from Dr Divett's decision in Mahon moves from being misconceived to having the appearance of being deliberately misleading when one considers the sentences used by Dr Divett immediately following the quote referred to by the appellant. For ease of reference, extracted below is the complete text of the relevant paragraph of Dr Divett's decision in Mahon[4], with the words used by the appellant appearing in normal type and the additional words contained in Dr Divett's paragraph set out in bold italics.
" Having concluded that there is a high level of correlation between the settlements by the respondent, after allowing for legal and valuation fees, and the former market valuations by Mr Horrigan, I accept that Mr Payne’s Sales 1, 2, 6, 8 and 9 each provide a reasonable weighted check against the valuation of the subjects. In applying the appropriate weighting to the opinions of Mr Horrigan and Mr Payne, I note that both have relied as experienced valuers upon sound comparisons of sales of rural homesites. (See Santos Limited v. Valuer-General (1989) 12 QLCR 231)."
[4] At p 28
As is plain from Dr Divett's own words, what he did in the quoted paragraph was accept as a reasonable weighted check five particular sales by one of the valuers, and then apply those sales to all of the evidence of the valuers in the case. Little more needs to be said.
I agree with the submissions made by Mr Isdale in this matter regarding the onus of proof that rests on the appellant and the appellant's failure to provide evidence of a sufficient clarity or probity to disturb the expert evidence of Mr O'Connor and the respondent's valuations. In particular, I note the reference made by Mr Isdale to the Land Appeal Court decision in JL & I Qualischefski & Ors against determination by Valuer-General - Shire of Laidley[5] where the Land Appeal Court in its judgment said, at p.172:
" The reasonableness of the allowances that have been made is always open to challenge on objection or appeal. However upon appeal a statutory onus of proof is cast upon the appellant and he has to accept, within the confines of the grounds set out in his Notice of Appeal to the land Court, the burden of proving the Valuer-General incorrect. Neither this Court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-general to substantiate his case. This is in contradistinction to jurisdiction conferred under the Land Act.
In appeals of the nature of the subject, the onus which the appellant must assume is not an easy one to discharge without the assistance of a registered valuer who can lead evidence as to sales analyses and/or comparison with valuations made by the Valuer-General in respect of comparable properties."
[5] 31 July 1979 6 QLCR 167
Conclusion
For the reasons set out above, I have reached the conclusion that the appellant has failed to establish that the respondent's assessment of the unimproved value in each matter should be reduced in any amount, or at all. It follows that each appeal must be dismissed.
Orders
1.Appeal AV2005/0933 is dismissed.
2.Appeal AV2005/0935 is dismissed.
3.Appeal AV2005/0934 is dismissed.
PA SMITH
MEMBER OF THE LAND COURT
0
1
0