Rodney v Valuer-General
[2014] QLC 26
•16 June 2014
LAND COURT OF QUEENSLAND
CITATION: Rodney v Valuer-General [2014] QLC 26 PARTIES: Philip Anthony Rodney & Elizabeth Alfia Mary Rodney
(appellants)
v Valuer-General
(respondent)
FILE NO: LVA808-12 DIVISION: General Division PROCEEDING: Appeal against annual valuation under the Land Valuation Act 2010 DELIVERED ON: 16 June 2014 DELIVERED AT: Brisbane HEARD AT: Cairns MEMBER: His Honour, WL Cochrane ORDER: The appeal is dismissed. CATCHWORDS: Land Valuation Act 2010
Statutory Valuation ― Land Valuation Act 2010 – Unimproved Value – Improved Land – Evidentiary Onus.
Land Valuation Act 2010
Valuation of Land Act 1944Lamb v Chief Executive, Department of Natural Resources and Mines [2005] QLC 0038
Lawson v Valuer-General [2012] QLC 0027
Nimmo v Chief Executive, Department of Natural Resources and Mines [2005] QLC 0028
Steers v Valuer-General [2012] QLC 12
APPEARANCES: Appellants in person represented by Mr Rodney.
Mr P Prasad – Legal Officer for the respondent.
Background
This is the decision in an appeal against the valuation of the Valuer-General, in respect of land located at 9 Seafarer Street South Mission Beach which is in the Cassowary Coast Regional Council area of Far North Queensland.
The valuation appealed against was made as on 1 October 2011 with the date of effect from 30 June 2012.
The land is otherwise described as Lot 141 on Plan 737608 Parish of Rockingham and has an area of 1000 m².
The land is burdened by an easement in Gross 601075170 burdening the land to the Council of the Shire of Cardwell over Easement C on RP 743174.
The subject property is located approximately 11.5 km south by road of the Mission Beach Post Office at South Mission Beach.
South Mission Beach, a beachside village located in the tourist region of the ‘Island Coast’ is about 25 km east of Tully, 60 km south of Innisfail and 145 km south of Cairns.
The setting of the subject land is well expressed by Mr Donnelly the valuer called by the respondent in the following paragraphs extracted from his report.[1]
“The subject property is located approximately 11.5 kilometres southerly (by road) of the Mission Beach Post Office at 9 Seafarer Street, South Mission Beach.
South Mission Beach is approximately 25 kilometres easterly of Tully, 60 kilometres south of Innisfail and 145 kilometres south of Cairns.
South Mission Beach is a beachside village located in the tourist region of the ‘Island Coast”, which is centred on the townships of Bingil Bay, Mission Beach, Wongaling Beach and South Mission Beach.
Good local amenities exist within the “Island Coast” strip with a primary school, post office, shopping centre, hotel, restaurants etc. with more comprehensive district amenities available in nearby Tully.
The subject property is near the southern end of South Mission Beach and is surrounded by residential development.”
[1] Exhibit 8, page 3 section 11.
Then, later in his report[2] he describes the property in the following terms:
“The subject property is an inside allotment on Seafarer Street that possesses good ocean and island view directly along Dunn Street from its vantage point of the highset residence located upon the land. The land is generally level along its Seafarer Street frontage with a gentle rise to its developed dwelling are then a gentle fall to its western boundary. The allotment is approximately 170 metres from the beachfront.
The subject property has a 3.0 metre wide easement along its northern and western boundary. This easement is for drainage and other purposes incorporating an underground pipe. The subject is impacted by the easement along its northern boundary as it restricts the developed area of the allotment.
The land is subject to some minor inundation and has experienced intermittent flooding in the past. The owner has advised that the flooding has worsened in the last couple of years.
The subject property adjoins a Reserve for Park and Drainage along its western boundary, which is intersected by an open drain incorporating a partly concreted section and a concrete pipe in close proximity to the subject’s north-western boundary.
This drain is heavily overgrown with weeds and fallen timber, which is preventing the flow of water causing the ‘backing up’ of water in the vicinity of the subject property.”
[2] Exhibit 8, page 3 and 4.
That description was not challenged by the appellant.
The “Island Coast” in which South Mission Beach is located is centred on the townships of Bingil Bay, Mission Beach, Wongaling Beach and South Mission Beach.
The subject land is located in the Mission Beach Coastal Zone in a conventional housing precinct pursuant to the provisions of the Cardwell Shire Planning Scheme which was adopted on 28 June 2007.[3]
[3] Exhibit 8, page 8.
The street on which the subject land is located, Seafarer Street, is a bitumen sealed road with concrete kerbing and channelling. It has the benefit of electricity, town water, telephone and sewerage services.
There is constructed on the subject land a high-set house which achieves ocean and island views directly along Dunn Street, the subject land being located immediately across the T-intersection of Dunn Street and Seafarer Street. That is to say there is no residential lot directly opposite the subject site which inhibits views down Dunn Street to the ocean.
The subject site itself is generally level along Seafarer Street rising only very gently to the area on the block where the dwelling is constructed and then falling gently to its western boundary which adjoins a reserve for park and drainage which has constructed along it an open drain incorporating a partly concreted section and a concrete pipe. The easement burdening the property which was referred to above is 3 metres long and runs along the northern and western boundary.[4] That easement is for drainage and other purposes and incorporates an underground pipe which easement, to a minor extent, inhibits or restricts the developable area of the allotment.
[4] Exhibit 8 Appendix 2 Survey Plan RP 737608.
It was acknowledged by both parties to this appeal that the subject property is subject, from time to time, to some minor inundation and has, in the past, experienced intermittent flooding. That flooding appears to be exacerbated by the drain to the western boundary being heavily overgrown with weeds and falling timber which causes backing up of water in the vicinity of the subject property.
The entirety of the surrounding lots are either given over to residential uses or are vacant.
There was no dispute between the parties that the highest and best use of the subject land was for residential purposes, with the respondent emphasising the likelihood of a high-set house which would take advantage of prospective ocean and island views.
The Court had the benefit of an inspection of the subject property together with other properties referred to by each of the parties in the company of the valuers and the appellants. That view greatly assisted in understanding the positions of the prospective parties.
The Valuation Process
This is an appeal against a valuation brought pursuant to the provisions of the Land Valuation Act 2010.
That Act made a number of significant changes to the valuation process which had previously been carried out pursuant to the provisions of the Valuation of Land Act 1944.
The Land Valuation Act 2010 retains an obligation upon the Valuer-General to carry out a valuation of all properties throughout Queensland for the purpose of rating, land tax and other associated purposes.
The respondent is required to comply in its conduct with the requirements of the Land Valuation Act when undertaking the various valuations required.
Indeed, in the current case the appellant has referred at some length to the publication produced by the Department of Natural Resources and Mines entitled Statutory Valuation Procedures and Practices under the Land Valuation Act 2010[5] and, basically, alleges that the respondent has failed to follow the protocols set out in that publication.
[5] Exhibit 5.
That document in its preamble describes its purposes being “to provide a concise public guide for the relevant valuation and procedures and practices when undertaking statutory valuations for rating, rental and taxing purposes under the Land Valuation Act 2010.
It is clear that that document is directed towards assisting valuers both within the Department and in private practice, as well as members of the public, to understand the obligations pursuant to the Land Valuation Act.
The document[6] sets out its rationale as follows:
“The document is required to ensure consistent, effective and efficient practices are adopted by valuers when carrying valuations under the Act. All valuers should be aware of the legislation and this procedure document should be read in conjunction with the legislation.”
[6] Exhibit 5, page iii.
The Land Valuation Act has brought about a change to the valuation process in so far as under the previous Act the Valuation of Land Act, all valuations were of unimproved value but now under the Land Valuation Act, valuations are broken into two categories namely: non-rural land which embraces residential, commercial and industrial land on the one hand and rural land on the other.
Pursuant to the provisions of the Land Valuation Act[7] the value of land to be valued by the respondent is, in the case of non-rural land, its site value which term is defined in the Act and for rural land, its unimproved value[8].
[7] Part 2, Division 1, Section 7.
[8]See the discussion of the valuation process by His Honour Mr Smith in Lawson v Valuer-General [2012] QLC 0027.
The Land Valuation Act also draws a distinction between the unimproved value of improved land (Chapter 2, Part 2, Sub-Division 4) and the value of unimproved land (Chapter 2, Part 2, Sub-Division 5).
Section 26 of the Land Valuation Act provides a meaning to the “unimproved value of improved land” in the following terms:
“26 What is the unimproved value of improved land
(1) If land is improved, its unimproved value is its expected realisation under a bona fide sale assuming all site improvements and non-site improvements on the land had not been made.
(2) However, the land’s unimproved value is affected by any other relevant provisions of this chapter.”
Similarly, s 29 provides a meaning for the value of unimproved land in the following terms:
“29 What is the site value and unimproved value of unimproved land
If land is unimproved, both its site value and its unimproved value are its expected realisation under a bona fide sale.”
The Dictionary in Schedule 2 to the Land Valuation Act defines ‘unimproved’:
“unimproved, for land, means land in its natural state.”
In the present case this valuation exercise is one which calls for the determination of the unimproved value of improved land.
In the Lawson decision footnoted above His Honour Mr Smith referred to a decision of His Honour Mr Isdale in Steers v Valuer-General[9] where His Honour was obliged to consider the valuation of rural land pursuant to the LVA.
[9] [2012] QLC 12.
His Honour Mr Isdale said:
[8]The use of sales to provide comparisons of value is well established. In NR and PG Tow v Valuer-General (1978) 5 QLCR 378, the Land Appeal Court constituted by Stable SPJ, Mr Smith and Mr Carter said at page 381:
“Courts of the highest authority have laid down that the best test of value is to be found in the sales of comparable properties, preferably unimproved, on the open market round about the relevant date of valuation and between prudent and willing, but not over-anxious parties.”
[9]This Court is required to follow the decisions of the Land Appeal Court and accordingly must prefer the evidence of comparable sales to the method contended for by the appellant, simply increasing a previous value by a factor of 10. Mr Steers did not explain why this particular multiplier and not some other one should be applied.
His Honour Mr Smith in the Lawson decision[10] also observed as follows:
[10] Ibid.
[14]I consider it remains a relevant feature under the LVA, to consider market value. As then President Trickett said in Fairfax v. Department of Natural Resources and Mines[11].
[11] [2005] QLC 11, 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 a 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.”
[15]Despite the legislative change, it is refreshing that the views expressed by the High Court in Spencer, now well over a century ago, remain just as current and relevant today as they did when they were first uttered. It is certainly my view, at least at this stage until other authorities may prove me wrong,[12] to continue to apply the Spencer test under the LVA.”
[12] Noting, of course, the provisions of s.18 of the LVA.
In addition to the changes with respect to the valuation process the regime established by the Land Valuation Act also brings a change in the evidentiary onus.
Under s.3 of the Valuation of Land Act the valuation made by the Valuer-General was deemed to be correct until proved otherwise either upon objection or appeal.
The Land Valuation Act does not retain that evidentiary provision but rather provides at s.169(3):
“However, the appellant has the onus of proof for each of the grounds of appeal.[13]
[13] Section 169(3).
The only grounds of appeal which are able to be contemplated at a hearing are those grounds stated in the valuation appeal notice.[14]
[14] Section 169(1).
Accordingly, the Rodneys are limited to those matters which are recited in the notice of appeal as clarified by the further and better particulars provided by them.
The Grounds of Appeal
In their notice of appeal the Rodneys provided a very broad set of grounds. They contended[15]
“Valuer-General failed to apply the correct principles of valuation.
Valuer-General failed to obtain relativity with adjoining and nearby lots.
Valuer-General failed to take into account all of the facts.”
[15] Exhibit 1, p. 3.
Needless to say no party confronted by such a general articulation of the grounds of appeal would have much idea of what those grounds meant or what they related to in the valuation process by the Valuer-General.
Because of the very general way in which the grounds of appeal were expressed, the Valuer-General sought further and better particulars of those grounds.
The request for further and better particulars sought that the appellants should provide particulars of:
(a)the correct principles of valuation which they contend should be applied;
(b)the correct principles of valuation relied upon to support the appellants’ estimated site value of the property;
(c)the relativities of the adjoining and nearby lots which were relied upon by the appellants to support the estimated site value of the subject property;
(d)the facts which it is said the Valuer-General failed to take into account; and
(e)how those facts support the appellants’ estimated site value.
The appellants responded by stating:
“correct principles of valuation that should be applied by the Valuer-General are those established by accepted practice, legal precedent and those principles set out in the Land Valuation Act 2010 and the statutory valuation procedures and practices under the Land Valuation Act 2010.”[16]
[16] Exhibit 4 page 1.
The particulars of the correct principles of valuation relied upon by the appellants to support their estimated value of the subject property were identified as:
“Statutory valuation procedures and practices under the Land Valuation Act 2010 manual especially Part 3 (3.2).
The “Spencer test”
Application of correct comparative sales in comparison to subject land.”
With respect to the request which sought particulars of the relativities of the adjoining and nearby lots the appellants identified the large number of allotments located in Seafarer Street in South Mission Beach, Reid Road Wongaling and four other properties located at Bunting Street and Moreton Street Wongaling Beach and Nautilus Street at Mission Beach.
Almost all of those lots were noted by the appellants to have been referred to in their notice of objection of 24 May 2012.
With respect to the “Spencer test” the appellants contend as follows:
“Under “Spencer” Valuer General has not made or has not made adequate allowances for the following –
Distance from amenities.
Easements.
Flooding.
Drains at rear.
Building expense outlay to achieve a view (two story dwelling required)
Vegetation, Shoreline preservation and tree planting obscuring view in the past and in the future.
Storm surge.
Incorrect sale comparisons made by the Valuer General in relation to assessment of objection when far more appropriate comparisons were available.”Having regard to the onus of proof set out above and the grounds of appeal contended for by Mr and Mrs Rodney, they bear the onus of proving that the appropriate valuation is the figure for which they contend, which as set out below ultimately emerged to be a figure of $114,000.
The Rodneys case
Mr and Mrs Rodney did not engage a valuer to provide a valuation report for them. Instead they relied upon their further and better particulars of their grounds of appeal together with a statement prepared by them.[17]
[17] Exhibit 7.
The statement by Mr & Mrs Rodney consisted of a chronology, a description of the general geographic area, and a summary of their case under the following headings:
a)Interpretation of the Land Valuation Act 2010 manual;
b)Valuer-General’s processing of appellants’ objection;
c)Relativity to subject lot;
d)Valuation of subject lot.
On a number of occasions this Court has had to deal with and comment upon appeals where one party (generally the respondent government department) engages the services of an appropriately qualified and experienced valuer and the other party chooses not to engage a valuer (very often for reasons relating to a cost of such an exercise) but seeks to challenge or undermine the opinion of the expert valuer engaged by the other party. Comments on the difficulties confronted by a party unwilling or unable to engage a valuer have been made on by various Members of this Court over a long period of time.[18]
[18] See for example Nimmo v Department of Natural Resources and Mines [2005] QLC 0028.
In the Nimmo case His Honour Mr Jones commented as follows[19]:
“[16]Assessment of the unimproved value of land is an enterprise considered to be within the province of a recognised area of expertise. Accordingly, in appeals such as these, a valuer's evidence on matters of opinion relating to his field of expertise would ordinarily be preferred to differing opinions of a lay person. However, it is quite another thing to say that, because the valuation of land is the issue, the valuer's evidence should automatically be preferred to that of a lay person.
[17]It may be that the valuer's opinion is expressed in a manner or upon bases which are unable to be scrutinised, or otherwise lacks rational explanation. It may also be shown that in reaching his opinion the valuer has relied on information shown to be wrong or has failed to take into account relevant and material facts.
[18]Accordingly, it is clear, in my view, that the opinions of value expressed by Mr Van Hees are not immune from challenge by the appellant. That said, in the absence of any demonstrated error of approach or reasoning on the part of Mr Van Hees, his opinions on matters within his field of expertise ought to be preferred to the opinions of the appellant on the same matters.”
[19] Nimmo v Department of Natural Resources and Mines [2005] QLC 0028, paras [16], [17], [18] p. 5.
It should be acknowledged immediately that Mr Rodney is in a slightly different position in so far as he gave evidence that while he was not a qualified valuer he had for about six or seven years after he turned 33 been employed by the Commonwealth Bank in which employment he was required to value vacant land both residential and commercial up to a value of about $250,000.[20]
[20] T 1-34 L 15.
In addition Mr Rodney and his wife have been property investors for some 40 years and, at various times, had held a property portfolio of up to 13 or 14 properties.
That experience equips Mr Rodney to cross-examine and challenge the valuation of the valuer engaged by the respondent but, in my opinion, the position remains clear that Mr Rodney is an advocate for his own case and his evidence cannot be regarded as having the hallmarks of independence and recognition of an obligation to assist the Court which is expected of an independent expert who is expected to adopt an entirely professional stance before the Court.
I shall return to that theme in my observations below relating to the report prepared by Mr Rodney.[21]
[21] Exhibit 7.
The appellants seem to have placed a great store upon the booklet produced by the Department of Natural Resources and Mines setting out the statutory valuation procedures and practices.
To put the appellants’ contentions into context it is necessary to give some indication not only of the location of the land but of the layout of streets in and around the subject site.
Seafarer Street is a street which runs in a north/south direction between Mission Beach Road and Midshipman Street. It is one street back from the Kennedy Esplanade and between the Kennedy Esplanade and Seafarer Street are a number of linking streets which form T-intersections.
Those streets are Dunn Street, Owen Stanley Street and MacGillivray Street.
So far as relativities are concerned each of the residential housing blocks on the western side of Seafarer Street directly opposite each of MacGillivray, Owen Stanley and Dunn Street (including the subject) has been ascribed a higher valuation than the blocks immediately adjacent to them and even higher valuations than the standard blocks to the north and south of their adjoining blocks.
The basis for this emerged in the evidence of Mr Donnelly the valuer called by the respondent.
Each of the blocks opposite a T-intersection has the potential for views down the street forming the T-intersection to the Esplanade and out to sea and the Whitsunday Islands beyond. The blocks immediately adjacent to each of those three blocks have an opportunity, it is thought by the valuers, for some oblique sea views as they do not look directly into a wall of residential development on the opposite side of the street.
The block opposite MacGillivray Street has a value of $187,500 (51 Seafarer Street) and the two adjoining blocks either side of that block have a value of $165,000 whereas the other blocks have a value of $109,000 (the “standard” blocks).
Similarly the block opposite Owen Stanley Street (with possibly the best potential views down Owen Stanley Street out to the sea) has a value of $210,000 (31 Seafarer Street) with the adjoining blocks again valued at $165,000 and the then adjoining blocks are $109,000. The subject site has a value of $155,000 with the adjoining blocks valued at $141,000 and the other adjoining block again reverting to the valuation of $109,000.
Those are the valuations which currently apply by reason of some recent adjustments which are referred to below.
All of the residential lots located along Seafarer Street are only a couple of hundred metres from South Mission Beach.
The original valuation valued the land at $187,500 but, on 5 September 2012 the Valuer-General notified the Rodneys that as a consequence of an objection against valuation, the objection had been allowed and the valuation had been altered to $172,500 on the basis that:
(a)when compared to sale prices of similar properties, the delegate decided a reduction in the valuation should be made;
(b)when compared to similar properties, the delegate decided a reduction in the valuation should be made.
It is against that amended valuation which Mr and Mrs Rodney bring this appeal.
In their notice of appeal they contend that the land should be valued at $109,000.
Subsequent to the filing of the notice of appeal, the Department of Natural Resources and Mines notified the appellants that the Valuer-General, after review of the site valuation of the subject property, had further reduced the valuation from $172,500 to $155,000 in accordance with s.163 of the Land Valuation Act 2010. Other lots along Seafarer Street have also had their values adjusted as referred to above.
$155,000 becomes the valuation contended for by the Valuer-General.
Mr Rodney appeared to view those adjustments to the valuations with great scepticism but there is no evidence before the Court that suggests anything untoward about them.
Because they provide a detailed explanation of the approach which the appellants say should be taken in considering this appeal it seems appropriate to record in this decision precisely how the particulars of the alleged failures by the Valuer-General are articulated with respect to each of the headings set out in the preceding quote. With respect to easements, flooding, drain at the rear of the property, building expense outlays to achieve a view, storm surge and the relevance of vegetation, shoreline preservation and tree planting obscuring the view both in the past and in the future, the appellants said as follows:
“EASEMENTS (Brought to Valuer-General’s notice objection 11/11/11 & objection 24/05/12)
Valuer-General’s initial valuation: 187500 1/10/2011
A 15000 (8%) deduction was made following objection 24/05/12. Valuer-General’s notes are somewhat unclear as a 15000 calculation was also made for what we assume to be a building height deduction but not brought to account on Action Sheet nor in the amended valuation.
For the purpose of this exercise we will assume the 15000 deduction was made for the easements as per the action sheet.
Subject lot has two drainage easements 3 metres wide, one at the Northern side 150m² Area and at the rear 60m² area. I consider the rear easement to be immaterial.
Given the emphasis the Valuer-General is placing upon a potential view from the secondary storey (a 58.26% premium over adjoining lots) and the inability to build over the easement to facilitate carports a far greater allowance may be reasonably possible for the easement on the Northern side.
For the purpose of this exercise would allow a conservative 5% as against the Valuer-General’s 8%.
FLOODING (Brought to Valuer-General’s notice objection 11/11/11 and objection 24/05/12)
Property has been subject to intermittent flooding over the past 25 years with water at various levels covering the rear of the property most wet seasons. On 9/3/2011 and 19/3/2012 however the water entered the bottom floor of the dwelling to a depth of approx 200 to 300mm. Given that slab is 200mm above ground level we would calculate a flood height of 500mm around dwelling and to 1 metre at rear of property. Our insurer was informed and photographic evidence is held.
Flooding will also very substantially increase insurance premiums. A fact not lost on any perspective purchaser under “Spencer”.
It is understood that following the Brisbane floods allowances are being made of between 10%-25% of valuation.
Given that waster has entered the premises on two recent occasions a minimum 15% allowance is considered acceptable. Valuer-General’s valuation 187500 15% deduction for flooding 28125 say 28000.
For the purpose of this exercise however we have approached the issue by calculating the cost of fill and compaction required to raise the total lot by .6 metre thereby rendering the immediate area around the dwelling 100mm above estimated previous flood height. It should be appreciated that this conservative approach does not place the rear of the property above previous flood height.
Area 1000m² x .6 metre = 600m3
600m3 @ estimated 25/m3 = 15000Costing has been taken from Valuer-General’s Basis Report to the Cassowary Coast Regional Council for valuation 1/10/2011 (Section 4.4 Cost Summary). This costing will be verified locally at South Mission Beach prior to hearing.
DRAIN AT REAR
Under ‘Spencer’ the hypothetical purchaser would take into account the drain immediately at rear of subject lot. Apart from the drain’s unsightliness it is usually filled with stagnant water, sometimes fresh, sometimes brackish.
It is well known that such an environment is a breeding place for mosquitoes especially but not only the Culex annulirostris and Verrallina funereal species.
These species are known vectors for such illnesses as Barmah Forest Virus, Japanese Encephalitis, Kujin, Murray Valley Encephalitis and Ross River Virus.
While a hypothetical purchaser would naturally suspect that such a drain would also harbour vectors carrying Dengue Fever we understand that this is unlikely.
We do not wish to appear alarmist but it is none the less a factor a purchaser would take into account. It is also a factor to be brought to account in any comparative sales comparison together with the unsightliness and occasional odour of the drain.
BUILDING EXPENSE OUTLAY TO ACHIEVE VIEW
(Brought to Valuer-General’s notice objection 11/11/11 and objection 24/05/12)Under the Spencer test the hypothetical purchaser would take into account the outlays needed to obtain a second story view in comparison to other comparative lots which can obtain views at ground level. For example No. 51 Seafarer Street with ground level sea views and a site value of 187500.
On limited and not verifiable or supported information available to us cost of ground floor slab and four walls without any allowances for windows or doors, internal partitioning etc. would be 23680 say 24000.
This amount will be verified at South Mission Beach prior to Land Court hearing and from initial discussions with design architects we anticipate the figure to be substantially greater, possibly double.
STORM SURGE
Subject lot has a far greater susceptibility to storm surge than any of the lots utilised by the Valuer General as comparative sales.
(Refer Action Sheet Objection to Unadjusted Valuation dated 16/08/2012 and associated information held by the Valuer-General)
Storm surge in the past has had dramatic and significant impact at South Mission beach.By way of example Cyclone Yassi recorded a surge of 2.97m at Clump Point to the North and 5.33m at Cardwell to the South. These figures are the height of the surge above the predicted tide.
In 1918 a surge covered South Mission Beach to 3.6m some hundreds of metres inland with debris 7m high in the trees.
This aspect would not be lost on any perspective purchaser under ‘Spencer’ and consideration needs also to be given to this aspect in analysis of any comparative sales.
VEGETATION, SHORELINE PRESERVATION AND TREE PLANTING OBSECURING VIEW IN THE PAST AND IN THE FUTURE
(Brought to Valuer-General’s notice objection 11/11/11 and objection 24/05/12)Under the Spencer test the hypothetical purchaser would take into account the likelihood of ocean views being totally non existent due to vegetation both n the past and in the future. Given that Council has undertaken a very robust foreshore replanting which was well known prior to valuation date and will almost certainly given its density obscure any view we believe that the following deduction for potential loss of view to be appropriate and has been already mentioned in previous Land Court judgments were Court allowed at 20% deduction for potential loss of view.
Again to be conservative we have allowed a 10% deduction.
Valuer-General’s initial valuation: 187500 1/10/2011 10% thereof: say 20000
In essence highest and best use is to be determined having regard to the planning scheme.
It is noted that the manual makes no reference to building specifications, heights, areas, construction materials etc.
Inclusion of heights of buildings by the Valuer General opens the valuation process to all manner of hypothetical variation. Do we take it further and dictate the very nature of materials to be used that maybe add value. I.e. Glass as against brick walls, do we include a pool, with industrial sheds do we include colour bond as against CGI or include gantries, do we take into account the hypothetical building height in order to provide a more visible advertising bill board again adding value to any commercial site. The list is endless but all can add value to the total site but confuse the process.
We contend that the paragraph:-
“The land is to be valued on the assumption that there is no approval for a particular development on the land or a credit against any future infrastructure charges. Also any right or condition dependant on the improvements on the site does not remain when the improvements are considered not to have been made (e.g. a liquor license).”
was intended to overcome any perception that the precise construction of any building as distinct from planning scheme/development approvals was to be used in the determination of a site valuation.
The simplest way to to value the property and meet the requirements of the Act is to ignore the hypothetical construction height required to obtain a view, accept that ‘all non site improvements on the land had never been made’, determine the planning scheme and support the valuation after appropriate deductions for easement flood etc with comparative sales. Such a method appears to accommodate both sections of the manual.
Comparative sales would naturally take into account the Spencer test in that it is assumed that both vendor and purchaser would be cognisant of any potential for view in the negotiation of sale price and the cost of achieving it.
By way of comparison the Valuer General valued the subject lot and 51 Seafarer St (with ground level views) at 187500. Common-sense dictates that the subject lot would attract a value less than 51 Seafarer St. for various reasons including flood and lack of ground level views.
It follows therefore that the correct site value would be the same as the two adjoining lots $109000 (base valuation Seafarer St) with some adjustment for flooding and easements as supported by comparative sales information set out below.
DISTANCE FROM AMENITIES
Amenities at South Mission Beach are virtually non existent.
These exist to some extent at Wongaling Beach (Approx 7km) and to a greater extent at Mission Beach (Approx 10km).
This issues needs to be brought to account in any valuation and sales comparison.”
Relativities
An issue arose before any evidence had been heard in the Court about adjustments to the valuations of land in and around the subject site including adjoining allotments which had been the subject of a maintenance revaluation.
Appendix 5 to the Report[22] of Mr Donnelly shows that 7 Seafarer Street which adjoins the subject property had been revalued from $109,000 to $141,000 as had 11 Seafarer Street. Similarly the lots adjoining 31 Seafarer Street which was valued at $210,000 had been adjusted from $109,000 to $165,000.
[22] Exhibit 8, Appendix 5.
Again, similarly, the lots adjoining 51 Seafarer Street had been adjusted upwards from $143,000 to $165,000 while the land at No. 51 has been adjusted to $210,000.
Mr Rodney, not surprisingly, complained that the lateness of those maintenance revaluations created a jeopardy for him in the presentation of his evidence.
That they were maintenance revaluations was disputed by Mr Prasad appearing for the respondent. He told the Court:
“The facts are that those adjustments were made and they were made on the basis that there being changes to the view potential from those particular lots as well as the neighbouring lots. The Valuer-General does make, from time to time, relativity adjustments accordingly. And in some cases, Your Honour, there is just generally speaking, once an appeal does come to foot there are sometimes some further relativity adjustments upwards or downwards made subsequent to an appeal or hearing and a decision being made.”[23]
[23] T 1-16 L 8-14.
Mr Prasad went on to advise the Court that those revaluations were done pursuant to s 94 of the Land Valuation Act.
Section 94 provides:
“94 Amendment for uniformity with comparable parcels
(1) A valuation may be amended if the valuer-general considers the amendment is necessary or desirable to achieve or preserve uniformity of values between the valuation and valuations of other comparable parcels.
(2) If the amendment reduces the amount of the valuation, the reduction is a comparable valuation reduction of the valuation amended.”
When that matter had been clarified by Mr Prasad I put the following to Mr Rodney:
“Mr Rodney. The position, just on the face of it – bear in mind I’ve had an opportunity, obviously, to look at your report, Mr Donnelly’s report, I’ve seen all of the lots that we looked at the other day on site. But one of the things that occurs to me is that these upward valuations and the most recent amendment to your valuation to $155,000 gives you a valuation which seems, on the face of it, to be advantageous compared to the other properties that are valued at 165.”[24]
[24] T 1-17 L 34 – 39.
After some debate with Mr Rodney I put to him the proposition that:
“But, nonetheless, your valuation at $155,000 seems to me to be an awful lot better for you than the valuation of the lot that looks straight own Owen Stanley Street at $210,000 and the lot that looks straight down McGillivray Street at $187,500.”[25]
[25] T 1-18 L 21 - 25.
Mr Rodneys response was to assert that:
“The only reason that our lot – the view of our lot appears better, Your Honour, is that we didn’t have the advantage of standing on a two-story building on either of those lots – other lots. In other words, our lot – our view is achievable from the second floor whereas when we viewed lot 31 and lot 51 we did not have the opportunity to stand at that level, 2.4 metres above the ground.”[26]
[26] T 1-18 L 26 – 31.
Ultimately Mr Rodney asserted:
“If you stand in my front yard and look down the road you would get no view.”[27]
[27] T 1-18 L 46.
That is patently incorrect. I had the benefit of standing on the front step of Mr Rodneys home and at street level and am satisfied that there are, albeit restricted, views of the sea and the foreshore straight down Dunn Street.
Mr Rodney contends that it was necessary to build a two-story building to get that view. I do not accept that.[28]
[28] T 1-19 L 3.
I should record that I am satisfied from the photos exhibited before the Court[29] that from the front of Mr Rodneys home views straight down Dunn Street embrace the water and the islands beyond. I accept that you do not see the sandy beach.
[29] Attachment 8 to Exhibit 7.
Indeed, on any view of matters, the view from Mr Rodney’s home is superior to that which can be achieved from the lots immediately adjacent to his.
Similar evidence is reflected in the report of Mr Donnelly,[30] where he said:
“The subject property is an inside allotment on Seafarer Street that possesses good ocean and island views directly along Dunn Street from its vantage point of the high-set residence located upon the land.”
[30] Exhibit 8, pp. 3, 5 and 6.
Mr Rodney produced a document ‘Schedule of Site Values – Seafarer Street’ which became Exhibit 9. That document set out and showed the amendments of lots adjoining numbers 9, 31 and 51 Seafarer Street as referred to above.
Following the exchange about the amended valuation and the evidence in Mr Donnelly’s report Mr Rodney ultimately contended that the value of his land should be fixed at $114,000.[31]
[31] T 1-22 L 9.
If, as seems from the concessions made by Mr Rodney, the valuation of a standard lot in Seafarer Street stands at $109,000, the task for this Court is to ascertain what premium if any should be attached to No. 9 having regard to its location opposite Dunne Street and what monetary sum represents that premium.
The question also necessarily arises as to what valuation of 9 Seafarer Street is necessary to maintain relativity with similar lots located at 31 and 51 Seafarer Street.
On Mr Rodney’s case that figure seems to be $5,000 and on the Valuer-General’s case the figure would be $46,000 (i.e. $155,000 - $109,000).
The variation in prices is not as abrupt as the figures referred to above make it sound because the lots adjoining No. 9 valued at $155,000 have each been valued at $141,000 while the lots adjoining No. 31 which is valued at $210,000 are each valued at $165,000 as are the lots adjoining No. 51 which is, in turn, valued at $187,500.
At the risk of stating the obvious there is also a gradation in values ascribed to the three lots in Seafarer Street which have views down the t-intersections in front of them. That is to say the valuations run from $155,000 for No. 9 to $187,500 for No. 51 and then on up to $210,000 for No. 31.
It goes without saying that the maintenance of relativities between land in similar areas but with slightly different and more attractive attributes is a matter which must be recognised and an attempt made to address it.
The Evidence of Mr Rodney
At the outset of his evidence Mr Rodney made it clear[32] that it was his view that over a number of valuation periods, the Valuer-General has failed to give proper consideration to all of the relevant features of his land.
[32] T 1-28.
He gave evidence of an earlier 2009 valuation where on objection, a valuation of $300,000 was reduced to $280,000, and ultimately to $250,000.[33]
[33] See Exhibit 7 page 1.
As I tried to make clear to Mr Rodney at the hearing, those matters are of historical interest only and not directly germane to the issues in the current appeals.
Mr Rodney’s particular dissatisfaction seemed to focus on what he said was a failure by the Valuer-General to attend to the procedures and practices set out in its Guideline Booklet referred to above.[34]
[34] Exhibit 5.
Mr Rodney also took issue with information disclosed on the action sheet in respect of his objection to the unadjusted valuation and asserted:
“In essence it would at least on the surface appear that the Valuer-General has selected sales to fit the predetermined valuation $187,500 as distinct from sales that assist in the determination of the valuation.
In other words the valuer arrived at a preconceived valuation then sought to obtain evidence in support of such a valuation.
We would not find such a process unusual while nonetheless incorrect for the following reasons.
Valuer had already processed previous disallowed valuation dated 11/11/2011.
Valuer had already undertaken considerable work in the area to justify general valuation movements.
Any disturbance to the valuation may placet (sic) in question other valuations both at South Mission, Wongaling Beaches and Mission Beach.”
The meaning of that submission extracted from his statement[35] is somewhat hazy.
[35] Exhibit 7, p. 7.
In any event the Court is not so much interested in how the Valuer-General may have responded to an objection, particularly in circumstances where subsequent to the determination of the objection a general reduction in the value of relevant lots was made by the Valuer-General pursuant to s 94 of the Land Valuation Act as in evidence adduced before the Court to support the valuation contended for.
The real test, as was made clear to Mr Rodney and which is set out above, is that the appellant has the onus of proof for each of the grounds of appeal.
In both his written statement[36] and in his oral evidence it became clear that Mr Rodney had issues with respect to the references to a two-story house being constructed on his property. The existing property is, of course, a two-story one.
[36] Exhibit 7 and attachments.
One particular issue that seemed to excite the interest of Mr Rodney was the reference to the opportunity to obtain views of the sea if a two-story residence was to be erected on his property.
In that regard Mr Rodney says:
“Inclusion of heights of buildings by the Valuer-General opens the valuation process to all manner of hypothetical variations. Do we take it further and dictate the very nature of materials to be used that may be add value. i.e. glass against brick walls, do we include a pool, with the industrial sheds do we include colour-bond as against CGI or include gantries, do we take into account the hypothetical building height in order to provide a more visible advertising billboard again adding value to any commercial site the list is endless but all can add value to the total site but confuse the process.”[37]
[37] Exhibit 7, page 6.
And then later in the same part of his submissions:
“The simplest way to value the property and meet the requirements of the Act is to ignore the hypothetical construction height required to obtain a view, accept that ‘all non site improvements on the land had never been made’, determine the planning scheme and support the valuation after appropriate deductions for easements flood etc. with comparative sales. Such a method appears to accommodate both sections of the manual.
Comparative sales would normally take into account the Spencer test in that it is assumed that both vendor and purchaser would be cognisant of any potential for view in the negotiation of sale price and the cost of achieving it.
By way of comparison the Valuer General valued the subject lot and 51 Seafarer Street (with ground level views) at 187500. Common-sense dictates that the subject lot would attract a value less than 51 Seafarer St. for various reasons including flood and lack of ground level views. In essence it could be argued that the view is being valued twice once by the Valuer – General in his valuation of 187500 and again in the cost necessary to achieve it.”
To my mind those passages reveal a lack of appreciation of the relevance of the ‘highest and best use’ and the Spencer test in valuation matters.
Both Mr Rodney and Mr Donnelly sought to establish a base site valuation for standard 1,000m² blocks in Seafarer Street.
It would appear that each of them agrees that a base site valuation for 1,000m² in Seafarer Street is around $109,000.[38]
[38] See the evidence of Mr Rodney T 1-33 L 38. Exhibit 7 p. 21.
Mr Donnelly approached his exercise in that regard by looking at comparable historic market evidence.[39]
[39] Exhibit 8, page 12.
Mr Rodney approached his achievement of that $109,000 value by a comparison of sales as well.[40]
[40] Exhibit 7, page 24.
At many points in his evidence Mr Rodney referred to the prospect that when beach vegetation regrows it has the capacity to impede the view from his property out to sea. He seemed not to accept that the valuation was at a point in time when the vegetation on the foreshore did not exist. If at a future time that vegetation was to become so abundant that no view of the sea was achievable then that would no doubt be reflected in the valuation which may issue at some time in the future. At the present time however the view situation from Mr Rodney’s land remains as I have set out above.
Mr Rodney also sought to quibble with the notion that the highest and best use of his land may be for a two-story dwelling so as to maximise the potential sea views. He argued that it was more expensive to build a two-story home than a single-story one but had no evidence to back up that proposition. It may be that the cost of a two-story house would reflect some economies of scale achieved by reducing the roof area required for example.
Mr Rodney’s submissions to this Court placed significant importance on the issue of views from the subject site as referred to above.
In his written submissions[41] Mr Rodney asserts as follows:
“Under the Spencer test the hypothetical purchaser would take into account the likelihood of ocean views being totally non-existent due to vegetation both in the past and in the future. Given that Council has undertaken a very robust foreshore replanting which was well known prior to valuation date and will almost certainly given its density obscure any view will believe that the following deductions for potential loss of view to be appropriate and has been already mentioned in previous Land Court judgments were caught (sic) allowed a 20% deduction for potential loss of view.”
[41] Exhibit 7 p. 18.
In support of that proposition Mr Rodney refers to the decisions in Nimmo v Chief Executive, Department of Natural Resources and Mines [2005] QLC 0028 and Lamb v Chief Executive, Department of Natural Resources and Mines [2005] QLC 0038.
The Nimmo case involved appeals against valuations of land located in South Brisbane approximately 1.5 km from the Brisbane CBD.
The matters in issue in the Nimmo case included:
“The impact of activities off the land including interference to views and loss of amenity”[42]
[42] Nimmo v Department of Natural Resources and Mines [2005] QLC 0028 [10].
In the Nimmo case Member Jones found as follows:
“I accept the evidence of the appellant, which was not seriously challenged, describing the nature and extent of the proposed development and that the details of the proposed development were on display on or about August 2001. I also accept that when built, the development will have some impact on views to the west. [43]
[43] Nimmo p.9 [45].
Later in the decision Member Jones added to those observations by saying:
“I do not accept that even in the worst case scenario the land would have no views to the north. However, I do accept that a prudent purchaser would have some real concerns about the security of the existing CBD views into the future and would be likely to require a discount to take account of that risk.”[44]
[44] Nimmo p.9 [118].
In the Lamb decision the Court had to consider both the impact of a heritage listing as well as potential impacts on very expansive views from an elevated block across the Brisbane CBD. The potential risk of loss of views arose from the potential for redevelopment of properties in front of the subject site. Such redevelopment it was found would almost certainly utilise a maximum building height of 8.5m and would probably be for multi-unit types of residential development close to the subject land. That is to say the view from the Lamb land would change from expansive views across the CBD to views partly obstructed by built form.
In his conclusion with respect to the issue of potential loss of views the learned Member Dr Divett observed as follows:[45]
“Now in the Nimmo matter, it was accepted by the Court that future building development upon lands on the South Bank were likely to gradually "obliterate views of the CBD buildings behind them" (paragraph [56]). The learned Member noted also that a prudent purchaser of the Nimmo land "having made those inquiries would be alerted to the fact that most, if not all, of the existing CBD views could gradually disappear over some uncertain (but not too remote) time in the future." (paragraph [64]). On that basis the Member made an allowance of "20% discount to take account of the risks associated with maintaining the present views" (paragraph [119]).
[45] Lamb v Chief Executive, Department of Natural Resources and Mines [2005] QLC 0038 p 44 [162].
With respect to the Lamb land Dr Divett agreed with an opinion expressed by the departmental valuer in drawing an analogy between the Nimmo conclusions and the Lamb property and noted:
“That with the Nimmo property, there had been no river views, so the 20% in current matters may be seen as a conservative allowance for any potential loss of both types of view. However, I also note that the risk of losing CBD views in Nimmo is entirely out of his capacity to influence it.”[46]
[46] Opsit para 163.
It is clear that the focus in each of the Nimmo and Lamb cases was on the impact of likely (yet to be constructed) buildings on existing views. Those impacts were caused because of the proximity of those likely to be erected buildings to the subject land.
I have come to the view that there is a vast difference in the present case insofar as the vegetation complained of by Mr Rodney as likely to impede views of the coast is on public land some couple of hundred metres from his property.
Further, there is no evidence before me at all about the height or potential impact of the plantings which have occurred in order to achieve regeneration and revegetation.
It should not be thought that I discount or disregard any allowance for the existence of views as between different lots of land.
In my view the difference (ascribed by the respondent) between the value of each of the lots at the T-intersections with views down the existing streets and their adjoining lots (in the present case the $155,000 as against $141,000 for the adjoining lots) reflects the advantage of the views down the street to the coastline.
The lots adjoining each of Nos. 9, 31 and 51 Seafarer Street all have valuations in excess of the baseline value of $109,000 which, as indicated above was accepted by both Mr Donnelly and Mr Rodney as being a fair valuation for the balance lots along Seafarer Street.
I am bound to observe that the higher values which are ascribed to Nos. 31 and 51 Seafarer Street reflect the enhanced opportunities for views which those two lots have over the subject lot at No. 9. Similarly the values ascribed to the adjoining lots reflect the better quality of the views likely to be achieved on an oblique basis from those lots.
I am also satisfied that, with respect to the question of relativities, the valuations which have been ascribed to lots 9, 31 and 51 Seafarer Street reflect the quality of each of those blocks compared to the others.
The higher valuations of the adjoining lots seems to reflect the prospect of some small oblique views being available from some parts of houses constructed on those lots. In the case of Nos. 7 and 11 Seafarer Street both of which are valued at $141,000 the increase over the $109,000 baseline is 29%. In the case of Nos. 29 and 33 the increase is 51% and in the case of Nos. 49 and 53 the increase is of a similar percentage. The higher valuations at Nos. 31 and 51 reflect better prospects for views which is confirmed from the inspection of the lands.
If the same mathematic logic is applied to the subject land at No. 9 it has been valued at 9% higher than the two adjoining blocks which again would seem to reflect the prospect of the view to be had down Dunn Street.
In the case of No. 31 the increase in value over the value ascribed to the adjoining lots is 21% and in the case of No. 51 the increase in value over adjoining lots is 11.8% (say 12%).
No. 31 is not burdened by an easement as Mr Rodney’s land is.
Mr Rodney also raised the issue of the potential for storm surge to affect his land and asserts that that potential ought be reflected in a reduced valuation.[47]
[47] See para 9 Exhibit 7.
Under cross-examination by the solicitor for the respondent Mr Rodney acknowledged that his property had never actually been inundated by a storm surge but maintained that there was the potential for that to happen.[48]
[48] T 1-35 L 30.
That the adjoining properties to his land would get oblique views of the coastline was acknowledged by Mr Rodney.[49]
[49] T 1-36 L 10.
Mr Rodney did acknowledge that No. 51 Seafarer Street which is Lot 123 is the subject of an easement similar to the one which burdens his property.[50]
[50] T 1-36 L 33.
So far as his methodology was concerned Mr Rodney told the Court[51] that he generally relied upon the comparable sales which were identified in the report of the Valuer-General. He did not seek to identify other sales which supported his case.
[51] T 1-37 L 12.
I am bound to observe that the appellants statement of evidence together with its various attachments seems to me, upon careful, to be riddled with extensive evidentiary shortcomings.
My reading of his statement of evidence suggests to me that, consistent with my reservations about his capacity to give evidence as an independent expert seeking to assist the Court, it is be premised upon a large number of unsupported assumptions and contentions.
I do not propose to canvas all of those shortcomings but on any reading of his statement it seems clear that such adjustments as are made to land values are contrived to produce a valuation which supports in an advocatorial way, the contentions of the appellant. That is to say they are not constructed or developed as one might expect in a valuation report prepared by an independent expert cognisant of his or her duties and obligations to the Court.
Valuation exercises are not the product of a precise scientific art. They are at best expressions of opinions. They are not exercises premised upon guesswork and nor are they the outcome of contrived calculations seeking to establish a particular value.
It is noteworthy that in his statement Mr Rodney apparently declines to advance or opine a particular value for his subject land. It was only pressed at the hearing of the appeal that he settled upon a figure of $114,000.
I do not propose to traverse all of the calculations contained within Mr Rodney’s statement.
It is sufficient to identify just a few of the evidentiary shortcomings.
At page 7 of his statement[52] Mr Rodney advances the criticism that:
“In essence it would at least on the surface appear that the Valuer-General has selected sales to fit the predetermined valuation of $187,500 as distinct from sales that assist in the determination of the valuation.”
[52] Exhibit 7, page 7.
I note as an aside that the valuation of the Valuer-General has changed from $187,500 to $155,000.
Mr Rodney goes on to assert:
“In other words the valuer arrived at a preconceived valuation then sought to obtain evidence in support of such a valuation.”
Even if that approach was actually demonstrated to my satisfaction (which it was not) exactly the same criticism can be made of the approach adopted by Mr Rodney in his report.
Further with respect to the lots located at Nautilus Street, Jackey Jackey Street and Southward Street Mr Rodney criticises the expressed views of the respondent as to whether those lots are either superior or inferior to the subject lot but does not provide any evidence or indeed any explanation as to why those opinions are incorrect or not worthy of consideration.
In criticising the figure of $109,000 settled upon by the respondent Mr Rodney contends that that figure ignores other sales for $90,000 to $125,000 but does not provide any analysis of what the unimproved value of the lots he considered should be.[53]
[53] See Exhibit 7, page 9.
In other cases Mr Rodney has considered only the issue of view and has taken no account of the matters of elevation or distance from the beachfront.[54]
[54] See Exhibit 7, page 9 and 10.
At pages 11 to 13 of Exhibit 7 Mr Rodney identifies a number of lots which he contends:
“Demonstrate lack of relativity to such lot.”
But he does not go on to provide any explanation as to why that lack of relativity is apparent.
There are throughout the statement various discounting and differential percentages which seem to be relied upon by Mr Rodney to achieve the figures for which he contends but no basis is provided nor was provided in his oral evidence as to why those particular percentage figures ought be accepted by the Court.
All in all I find the statement of Mr Rodney of limited use in carrying out the exercise which I am obliged to do.
The Evidence of Mr Donnelly
Mr Donnelly is a registered valuer and has been so since 1989 and has had a particular involvement with the Cassowary Coast Regional Council area since 2010.
He was the departmental valuer responsible for the site valuation assessment subject to this appeal.
Mr Donnelly gave evidence that fundamental to his approach to the valuation exercise required of him was the need to establish the valuation of a “standard” block in Seafarer Street on the western side with an area of 1,000 m². He settled upon a valuation of $109,000 per lot.
As I note above Mr Rodney conceded that that was a fair and reasonable valuation for those “standard” blocks.
In coming to his view as to the appropriateness of the $109,000 figure Mr Donnelly looked at the land sales at 7 Jackey Jackey Street, 11 Voyager Street and at 9 Spinnaker Street.
The land on Jackey Jackey Street is an easy sloping regular inside allotment with a northerly aspect and a typically urban outlook. It is almost twice the distance from the beach of the subject land but is in a similar zone and is somewhat further south.
Jackey Jackey Street does not bear the burden of an easement and enjoys the benefit of full town services.
Mr Donnelly regarded it as inferior to the subject site and from its sale on 25 October 2011 analysed (in his view) to an applied site value of $101,000 at the relevant valuation date in October 2011.
Mr Donnelly’s evidence did not reveal the relevance or weighting of the matters of distance, the absence of an easement or its elevation in coming to the valuation of $101,000.
The land to which he referred at 11 Voyager Street was described by him as having “a northerly aspect” and “average urban outlook”.[55]
[55] Exhibit 8, p 10.
That site which was viewed on the inspection rises gently from its street frontage and is approximately 500 m by road from the beach front. It is about the same distance south from the subject site as the Jackey Jackey Street land. (780 m v 710 m).
Again comparisons with the subject site are complicated by the Voyager Street site being much more distant from the beach but at the same time more elevated than the subject site.
Mr Donnelly’s analysis of the sale of Voyager Street on 21 December 2011 at a price of $95,000 analysed to a value (upon which he was not seriously challenged) at the relevant date of $94,000.
The land to which Mr Donnelly referred on Spinnaker Street is of a size commensurate with the subject (1,031 m²) and is again a regularly shaped inside allotment with what Mr Donnelly described “as an average urban outlook”[56]
[56] Exhibit 8, p 11.
The Spinnaker Street land is 430 m² by road from the beachfront, enjoys the benefit of full town services, and is similarly zoned under the Town Planning Scheme as the subject site.
Mr Donnelly asserts, and the inspection, in my view, confirmed, that that land is slightly more elevated than the subject property and has no easement although it has no sea views which I have already found below is an attribute of the subject land.
Mr Donnelly expressed the view that the land in Spinnaker Street is inferior to the subject site and analysed to a value of $105,000 with a 2011 applied site value of $95,000.
Mr Donnelly also acknowledged a sale at 7 Jackey Jackey Street on 19 September 2003 for $88,000. That sale occurred approximately six weeks earlier than the sale of 27 Seafarer Street at a price of $164,000.
By way of support for the views expressed by him in his report Mr Donnelly asserts
“These earlier sales of similar date indicate the superiority Seafarer Street held over Jackey Jackey Street as a residential location at that time with a price differential of $76,000 or 86%. It is acknowledged that this historical premium is no longer applicable given the sub-divisional development that has occurred in South Mission Beach and the associated compression in land values.”[57]
[57] Exhibit 8, p 11.
Mr Donnelly’s analysis of the land sales referred to above led him to the view that an applied level of $109,000 for what might be regarded as “standard” blocks in Seafarer Street was a fair and reasonable and “possibly conservative” valuation of the lots in the context of the historical market evidence.[58]
[58] Exhibit 8, p 12.
Mr Donnelly then moved on to the task of seeking to establish an appropriate value premium for those allotments on Seafarer Street which possessed or had the potential to possess ocean and island views.
His analysis of 51 Seafarer Street which is of an identical size to the subject lot but which enjoys, in my view, better ocean and island views along McGillivray Street and also has the burden of an easement traversing its northern boundary, reflected the fact that it sold vacant on 26 February 2004 for $350,000.
That is some seven years prior to the relevant date for the valuation exercise which this Court must carry out.
Mr Donnelly took comfort in his reliance upon the sale of 51 Seafarer Street from the sale of 27 Seafarer Street some 11 days earlier, referred to above, at a price of $200,000, having earlier been sold in October 2003 for $164,000.[59]
[59] Exhibit 8, p 11.
It should be noted and I acknowledge as relevant consideration that 51 Seafarer Street is located within a Medium Density Residential Zone which potentially allows for a more intensive level of development on that lot.
In diminishing the impact of that consideration Mr Donnelly points to the lack of demand for multiple unit development use in the location at the relevant time and since.[60]
[60] Exhibit 8, p 13.
I should record, as Mr Donnelly sets out in his report,[61] that the site values, when one compares 51 Seafarer Street at $187,500 and the $109,000 valuation applied to 27 Seafarer Street, represent a 72% premium for an allotment possessing ocean and island views from ground level over an allotment with no such potential.
[61] Exhibit 8, p 13.
It seemed to me having heard all the evidence that Mr Donnelly’s approach to the valuation exercise was realistic and that the valuation which he has ascribed to No. 9 Seafarer Street reflects the percentage premium which ought be applied to land possessing or having the potential for ocean and island views.
If one has regard to the opinion expressed by Mr Donnelly in his report[62] where he says:
“The 2011 applied site value for 51 Seafarer Street is $187,500 and $109,000 for 27 Seafarer Street. These site values represent a $78,500 or a 72% premium for an allotment possessing ocean and island views from ground level over an allotment with no such potentials. This value relationship generally mirrors the percentage premium established via the earlier sale.”[63]
That appears to me to be consistent with the approach adopted by him throughout his report.
[62] Exhibit 8, p 13.
[63] Exhibit 8, p 13.
Mr Donnelly goes on to assert that the subject property is superior to the standard Seafarer Street allotment with no ocean or island views but inferior to Nos. 31 and 51 Seafarer Street given their superior ground level views and lesser or no easements and arguably less flood prone nature.
Based on the inspection and the other evidence before me I accept that that is a fairly accurate assessment.
When one considers the issue of relativities it appears that there in fact several areas in which the issue of relativity must be considered.
The first of those is the relativities between 9, 31 and 51 Seafarer Street each of which is at the head of a t-intersection and therefore enjoys varying views across the t-intersection towards the coast. Secondly, there is the issue of relativity as between each of those lots Nos. 9, 31 and 51 and there immediately adjoining lots each of which has the potential for an oblique view from at least part of the lot down the relevant road to the coast. Thirdly, there is the issue of relativity between land in Seafarer Street and in the other streets to which reference is had, in particular Jackey Jackey Street, Voyager Street, Spinnaker Street and Nautilus Street at Mission Beach.
Having regard to those various relativities I am of the view that Mr Donnelly’s approach constitutes an internally consistent and logical approach to the valuation exercise which confronted him.
A difficulty for both parties was the absence of sales of directly comparable land.
To some extent that difficulty was overcome by the historic sales in Seafarer Street which demonstrate a superiority over land in Jackey Jackey Street.[64]
[64] Exhibit 8, pp 11 & 12.
Similarly the relativities between Seafarer Street properties possessing ocean and island views and what have become referred to as “standard” Seafarer Street allotments is confirmed by the sale of 51 Seafarer Street in 2004 for $350,000 and the sale of 27 Seafarer Street at a similar time for $164,000 in October 2003 and then for $200,000 in March 2004.
As indicated at the outset it is the evidentiary responsibility of the appellant who bears the onus of proof for each of the grounds of appeal to demonstrate that, having regard to those grounds of appeal, the valuation contended for by the respondent should not stand but be replaced by another valuation.
In my view Mr Rodney on behalf of himself and his wife has failed to discharge that onus.
In particular Mr Rodney’s approach to the issue of flooding does not satisfy me that the matters raised by him namely the risk of future flooding, the increased cost of insurance premiums and the cost of fill and compaction required to raise the lot to a flood immune level warrants amendment of the valuation contended for by the respondent.
In particular, the issue of flooding bears upon the valuation of much of the land in Seafarer Street and not just the Rodney property.
With respect to the issue of the drain at the rear of the block that is a disamenity that is also suffered by the adjoining properties and in my view is reflected in the relativities between the properties along Seafarer Street. I see no basis justified on the evidence before me for making further allowance for the existence of the drain
The issue of the easement does call for some consideration but again the existence of an easement at No. 51 Seafarer Street and the sales evidence with respect to that property convinces me that sufficient account of the existence of the easement is reflected in the valuations of the lots. The existing easement is down the side of the property and does not, to my mind, inhibit the capacity to build on or to enjoy the totality of the 1000 m² block.
I have addressed the issue of the alleged building expense outlay to achieve a view from the subject land and also the issue of vegetation which may emerge consequent upon shoreline preservation and replanting which has occurred in the recent past. If that planting grows in such a way to constitute a serious impediment to the quality of the views enjoyed from the subject property at a time in the future then that is a matter which may be taken into account at that uncertain time in the future.
I have endeavoured to address all of the issues raised by Mr Rodney. As I noted earlier his notice of appeal was somewhat unsatisfactory as the grounds of appeal were so broadly expressed that one could not easily glean what case had to be met or indeed, having regard to the onus on Mr Rodney, what matters he proposed to advance in his evidence.
Having been given the opportunity to provide better particulars of those grounds of appeal Mr Rodney produced particulars of somewhat greater particularity but also to some extent utilising a very liberal view of what was meant in the actual notice of appeal.
In all of the circumstances however I am satisfied that Mr Rodney has, on behalf of himself and his wife failed to discharge the onus which the Land Valuation Act 2010 places upon him and accordingly the appeal is dismissed.
Order:
The Appeal is dismissed.
HIS HONOUR, WL COCHRANE
MEMBER OF THE LAND COURT
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