Reichelt v Department of Natural Resources and Mines

[2003] QLC 7

LAND COURT OF QUEENSLAND

CITATION:Reichelt v Department of Natural Resources and Mines  [2003] QLC 7

PARTIES:Heinz Reichelt

(applicant)
  v.

Chief Executive, Department of Natural Resources and Mines 

(respondent)

FILE NO:  AV2002/0780

DIVISION:  Land Court of Queensland

PROCEEDING:  An Appeal against an Unimproved Valuation – Valuation of Land Act 1944 – Shire of Douglas

DELIVERED ON:  6 February 2003

DELIVERED AT:  Brisbane

HEARD AT:  Mossman

MEMBER:  Mr RE Wenck

ORDER:The appeal is allowed.  The valuation of the chief executive is set aside and the unimproved value of the land described as Lot 33 on Plan SP113394, Parish of Alexandra, is determined in the amount of Thirty-five Thousand Dollars ($35,000) as at 1 October 2000.

CATCHWORDS:  Statutory Valuation – Valuation of Land Act 1944 – Unimproved value – Principle of relativity not preferred to exclusion of sales evidence – Unimproved value applied to individual sale land rather than analyses of sales which provides foundation for relativity comparison.

Statutory Valuation – Unimproved value – Factors affecting value – Noise emanating from vehicular ferry – Whether sufficient allowance made.

APPEARANCES:  Mr H Reichelt, the applicant, in person
  Mr R Paterson for the respondent

1. Mr Heinz Reichelt is the registered proprietor of land described as Lot 33 on Plan SP113394, Parish of Alexandra, County of Solander, containing 2.765 ha. 

2. The irregular shaped site is situated on the northern corner of Forest Creek Road and Cape Tribulation Road, Forest Creek, near the northern bank of the Daintree River and about 400 metres north of the vehicular ferry crossing.  Access is gained off the bitumen sealed Forest Creek Road.  Telephone and garbage collection are the only services available.

3. The land rises steeply to a central ridge, the spine of which is moderately sloping.  A benched site within a cleared area of about 4,000 m², being the area of highest elevation on the land, accommodates a low-set dwelling, accessed by a formed earth driveway about 200 metres in length off Forest Creek Road.  Good views are available from the homesite area to the east and south-east over a channel of the Daintree River.

4. The land is zoned "Residential–Rural" within "Precinct A" of the Douglas Shire Council Development Control Plan 3.  "Precinct A" covers most of the lands in the locality which are considered to have high biological or scenic values.  It was the evidence given by Mr IS Quirk-Anderson, the chief executive's valuer responsible for the valuation appealed against, that "in general, the aim of the precinct is that the existing levels of development are to be retained and that there is to be no further intensification of development beyond that permitted without consent".  The locality is one of fairly light density residential-rural development amongst a generally naturally heavily vegetated environment.  The subject land falls within a "Vegetation Protection Area" under "Local Law No. 56" and a permit is required for any clearing of vegetation. 

5. The subject land was valued by Mr Quirk-Anderson in the amount of $38,000 as at 1 October 2000.  The valuation was issued on 5 March 2002, the effective date being 30 November 2001.  The land had previously been valued as part of a larger parcel which had been reconfigured into two lots.   The other lot (Lot 7, SP113394) had been sold by Mr Reichelt under contract dated 15 November 2001.

6. Mr Reichelt objected to the valuation and being dissatisfied with the chief executive's decision on the objection, filed a Notice of Appeal in the Land Court.

7. The grounds of appeal are as follows:

   "Excessive noise from ferry operating on Daintree River.
     Lower valuation of neighbouring properties."

8. Mr Reichelt attended the hearing and gave evidence in oral and written form in support of the grounds of appeal.  He tendered a video tape recording for the purpose firstly of demonstrating the level of noise emanating from the operations of the vehicular ferry, both at close range and from within the dwelling on the subject land.  The second purpose was to depict the outlook and views available from the subject land and the nearby lands to which reference had been made by him in the process of comparing relativity of valuations.

The Noise Issue

1. Mr Reichelt had some doubts as to how the extent of the noise from the ferry operations and the resultant disturbance caused to quite enjoyment of the property, particularly at night, might be fully appreciated during inspections for valuation purposes.  The video tape audio was helpful in that regard and there was no dispute from the chief executive as to the evidence presented by Mr Reichelt relative to this issue.  His statement included an attachment setting out the number of times during a short period in October 2002 that the intermittent and intrusive ferry noise had extended into the night and often until around midnight.  The nature and level of noise awakens him from sleep.  The operating hours of the ferry are 6 a.m. until midnight daily.  Mr Reichelt tendered copies of newspaper articles concerning complaints by both himself and the wider community regarding the noise and ferry operations generally.  The noise has been identified in those articles as emanating primarily from contact between the steel ramps of the ferry and the concrete berthing ramp into the river. 

2. From a general valuation perspective, Mr Reichelt interpreted the noise issue as likening the ferry environment to one of an industrial nature as opposed to the "peace and quiet" which would otherwise have been an expectation of such a locality and the Council's town-planning aims and objectives.

The Relativity of Valuations Issue

1. From one valuation relativity perspective, Mr Reichelt saw the amenity of his land as being adversely affected to a more significant degree than was the amenity of land with increasing distance from the ferry. 

2. From a further valuation relativity perspective, he was of the opinion that there was a demonstrable lack of proper relativity between the valuation of his land and valuations of other lands nearby.  He drew particular attention to five lots being Lots 1 to 4 on RP 737234 and the adjoining Lot 7, SP113394, each of which fronted Forest Creek Road and backed onto Ronald Road.  Each of these blocks had an area slightly in excess of 1 ha and generally enjoyed what he described as "far superior views".  Each of Lots 1 to 4 had been valued by the chief executive at $23,000 and Lot 7 at $24,000 at the same relevant date of valuation.  Mr Reichelt did not accept that any significant advantage or disadvantage resulted from size comparisons due to the similar usage potentialities of each site in the locality, being effectively limited to that of a single homesite, within the naturally vegetated and relatively steep environment.  He then drew attention to the valuations of Lots 58 and 59, RP 73587 in George Road (3.456 ha and 8.34 ha respectively).  Lot 58 is valued by the chief executive at $27,500 and Lot 59 at $38,500.  He described both lots as having "superb views", with the "added benefit to mine as they have creeks traversing the property thereby negating the necessity to have a bore installed for water supply purposes."  He saw Lot 59 as "a far superior parcel to mine" being four times the area, with views, and two creeks.

3. Mr Reichelt was also concerned that as vegetation protected by the Council's tree clearing policy, particularly on land external to his, grew continually thicker and taller, the obtainable view from his site diminished.  He claimed that since he first went onto the land in 1992 he had lost approximately 60% of the view due to vegetation regrowth.

Valuation Appealed Against

1. Mr Quirk-Anderson has been the chief executive's "operational" valuer for Douglas Shire since 1993.  His valuation of the subject land had been made on the basis of his assessment of its comparison with various sales all of which are zoned "Residential-Rural".

2. Brief details of the sales, together with Mr Quirk-Anderson's comparison opinions and comments, are as follows:

   1.Lot 35, Ronald Road, 2.024 ha, sold 20 December 1994 for $35,000, unimproved, dense rainforest scrub moderately sloping below road, close to subject land, limited rainforest outlook, inferior to subject, unimproved valuation $32,500 1 October 2000.

   2.Lot 34. Ronald Road, 2.021 ha, sold 28 April 1997, for $37,000, unimproved, dense rainforest scrub moderately sloping below road, moderate views of Alexandra Ranges to the north-east, available from top of the property, inferior to subject, unimproved valuation $38,500 1 October 2000.

   3.Lot 17, Thornton Peak Drive, 1.369 ha, sold 14 September 1999 for $40,750, unimproved, low-lying softwood scrub, swampy in places, drains into non-perennial creek along rear boundary, limited views and outlook, uncleared at date of sale, services include electricity, inferior topography, superior services (electricity) to subject, overall inferior, unimproved valuation $27,500 1 October 2000.

   4.Lot 23, George Road, 2.204 ha, sold 15 November 1999 for $55,000, analysed unimproved value $50,000, narrow rectangular shaped lot, moderately sloping above road, uncleared at date of sale, well elevated extensive ocean and range outlook to east, smaller than subject, inferior gravel access, long narrow shape, topography superior, similar services, does not have views over Daintree River, inferior to subject, unimproved valuation $31,000 1 October 2000.

   5.Lot 5, Forest Creek Road, 1.157 ha, sold 31 October 2000 for $35,000, analysed unimproved value $31,500, about 3 km north-west of subject, gravel road, moderately sloping above road, limited rainforest outlook, inferior to subject, unimproved valuation $31,000 1 October 2000.

   6.Lot 7, Ronald Road (fronting Forest Creek Road), 1.468 ha, sold 15 November 2001 for $30,000 unimproved, adjoins subject land and part of original parent parcel, sold by Mr Reichelt, practical access from Ronald Road, moderately to steeply sloping, well elevated with good outlook to south-west, smaller than subject, superior front and rear access, inferior shape and topography, slightly inferior outlook, overall inferior to subject, unimproved valuation $24,000 1 October 2000.

3. Mr Quirk-Anderson had given specific consideration, he stated, "to the issue of excessive ferry noise from the Daintree River Ferry" through the comparison with his Sales 2 and 6, adjoining the subject land, positioned on the same ridge line and within a similar distance from the ferry crossing.  His report contained the comment that "the relativity between the subject and these properties is considered to be reasonable, and proper allowance" (for the noise factor) "is reflected in the applied Unimproved Capital Value."  In his oral evidence he offered the opinion that the noise disability would be about the same as the subject or slightly less on the Sale 6 land, while the Sale 2 land was more protected by the intervening ridgeline.

4. There was some conflict between Mr Quirk-Anderson's written and oral evidence with regard to the unimproved valuation of the Sale 2 land.  His oral evidence was that rather than the applied relativity being correct, he had now formed the opinion that the valuation of the Sale 2 land was "a little too high".  Although the sale had taken place well before the date of valuation he was of the opinion, and there was no real dispute between the parties on this issue, that the market had remained relatively static but certainly had not increased during the intervening period.  Despite the noise disturbance on the subject land being greater, he maintained that the subject land was superior to Sale 2 because of its larger size and its superior location and views.

5. Mr Reichelt did not agree with Mr Quirk-Anderson's opinion as to the superiority of the subject land over Sale 6, the block which he knew well as the vendor in the transaction.  He thought the outlook from both blocks was similar and believed that Mr Quirk-Anderson was influenced too heavily by the size differential between the subject and the Sale 6 land as well as the adjoining Lots 1 to 4.  Mr Reichelt was of the opinion that the potentialities of the smaller lots were little different because once a suitable available homesite was selected "the remaining land is unable to be used for any other purpose as it is either too steep, or if it is not too steep, the trees are unable to be cleared."

6. Mr Quirk-Anderson accepted that clearing of vegetation required a permit but he was of the opinion that as the vegetation on the subject land at least, was predominantly regrowth and classified as "Remnant – Not of Concern" it was "plausible that if applied for a permit could be granted."  He recognised however that there was no certainty that further clearing "would ultimately be allowed."

7. His overview of the relativity situation was that "in the lower Forest Creek Road, George Road and Ronald Road locality" applied valuations ranged between $23,000 and $47,000, the median being $29,000.  He regarded a median lot as being about 2 ha in area, accessed by about 2 km of gravel road, having low to moderate elevation and outlook and being about 1.5 km on average back from the Daintree River.  He saw the subject property as being one of the higher valued allotments in the locality due to it being larger, having better views and outlook than the norm and having direct bitumen road frontage and access, being located handy to the river, "although this is offset to a degree by noise disturbance".

Overview

1. It is assumed that the rationale behind the establishment of existing relativities between the valuations of residential-rural sites in this locality, as described by Mr Quirk-Anderson, is reflective of market evidence over an extended period of time.  However, the sales evidence relative to the valuation appealed against, as provided by Mr Quirk-Anderson, and the application of that sales evidence to the individual sale sites, does not reveal any particular pattern which assists in interpreting the market forces influencing individual site values.

2. It is well established that "the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land" and "whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence".  (See Grahn v Valuer-General, Land Appeal Court, (1992-93) 14 QLCR 327 at p.328.)

3. However it needs to be recognised as discussed by the Land Appeal Court in Natural Resources v Radlett (1997-98) 18 QLCR 397 at pp.402-404, that, in achieving equitable relativity between valuations it is the valuations actually "applied to the individual sale lands based on the overall evidence, rather than the individual sales "analyses" which provide the foundation for direct comparison. If the applied valuation is seen to be too far removed from the analysis of the sale, in any particular case, then it may be found that that particular sale has been disregarded and is of no assistance.

4. In this matter, Sales 3 and 4 are seen to have been disregarded, while Sale 6 has been applied very conservatively.  Conversely, while Sale 2 has not been disregarded, the applied value exceeds the analysed sale price and there has been an admission by Mr Quirk-Anderson that the applied valuation is "a little too high" and should be reviewed.  As a consequence, the degree of assistance which Mr Quirk-Anderson sought to obtain from Sales 2 and 6, both adjoining the subject land, and both with varying degree of ferry noise disability, is reduced.  Sales 1 and 5 and Sale 5 particularly, would suggest that if the subject land had no ferry noise disability the applied valuation would be in fact overly conservative.  That suggests that some allowance has in fact been made for the noise disability as suggested by Mr Quirk-Anderson.  It is his professional opinion that due primarily to smaller size, inferior shape, topography and slightly inferior outlook the Sale 6 land despite its superior access but fairly similar if not a little less intrusive noise disability, is inferior to the subject land.  Mr Reichelt disagrees, but I prefer Mr Quirk-Anderson's opinion in that regard.  It seems to me that the relatively heavy discount which has been "applied" to the valuation of the Sale 6 land is also reflected in the valuations applied to Lots 1 to 4, particularly when compared to Sale 5.  One explanation for that is seen to be that a cautious approach may have been taken to the vehicular ferry noise factor.

5. I am concerned that a similar cautious approach has not been fully taken with regard to the subject land where the noise disability appears to have the greatest intrusive impact.

6. Therefore, based strictly on Mr Quirk-Anderson's application of the sales evidence to the sale lands, and particularly Sale 6, I have decided to exercise the benefit of doubt in favour of the appellant and reduce the valuation of the subject land to $35,000.

7. A difficulty obviously remains with relativity of valuations particularly with that applied to the Sale 2 land, which rather than being "a little too high", might be better related to the valuation applied to the Sale 1 land to which it appears, on Mr Quirk-Anderson's description, it is "a little superior".

8. I do not accept Mr Reichelt's argument that even strictly on relativity issues the valuation of the subject land should be similar to those immediately adjoining along Forest Creek Road being the Sale 6 land or Lots 1 to 4.  There may be some merit in his argument that the valuation of the subject land, even as found in this determination, is high in comparison with the valuations of the larger Lots 58 and 59 in George Road.  It may be however that the true position is that the valuations of those lots, despite their inferior location are, for whatever reason, too low.  However, as the Land Appeal Court said in Barnwell v The Valuer-General (1989) 13 QLCR 13 at p.16:

   "It is desirable that valuations made for the purposes of the Valuation of Land Act 1944 of comparable lands should bear proper relativity, one to the other, so long as the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis."

Order

The appeal is allowed.  The valuation of the chief executive is set aside and the unimproved value of the land described as Lot 33 on Plan SP113394, Parish of Alexandra, is determined in the amount of Thirty-five Thousand Dollars ($35,000) as at 1 October 2000.

RE WENCK

MEMBER OF THE LAND COURT