Ronald Rosanove v Chief Executive. Department of Natural Resources
[2000] QLC 84
•28 June 2000
[2000] QLC 84
L-----------____, - LAND COURT,
BRISBANE
28 June 2000
Re: Appeal against Rental Valuation -
Valuation of Land Act 1944 -
Valuation Roll No: 804-7 -
Local Government: Bowen Shire.
(RV98-913).
Ronald Rosanove
v.
Chief Executive. Department of Natural Resources
(Hearing at Bowen)
DECISION
Background:
This matter relates to Poole Island which is located about 1.3km east of the town of Heronvale, which in tum is located about 15km directly south of the Town of Bowen. The land comprises the whole of Poole Island which is described as Lot 54 on Plan HR735, Parish of Dargin, arid has an area of 20.23 hectares. The land is held under Special Lease No 51481, and is held in the name of Poole Island Holdings Pty
| Ltd. | The key issues are access to the island, comparison of sales and relativity. |
Access to the island is available by sea or air, as there is a small airstrip on the island, although its capacity is not known. Sea access is available from either Bowen or Heronvale. Access to Heronvale is by a dual-lane bitumen sealed road for 5km from the Bruce Highway. There are no services on the island, and electricity is supplied by generator, and a septic system has been installed, and also a radio telephone service. There is no natural water supply, but water is captured from a small well and rainwater tanks. The island is zoned as "Tourist and Recreation" under the Town Plan of the Bowen Shire Council effective at the date of valuation of 1 January 1996.
| On 1 August 1998, the Chief Executive issued a valuation of the subject land at $124,000. Following an objection the Chief Executive confirmed that unimproved |
value on 4 November 1998. The appellant has now appealed that-figure claiming the
unimproved value should more properly be $25,000.
Doctor Ronald Rosanove appeared and gave evidence on his own behalf. Mr Damien Grealy, Counsel of Crown Law, represented the respondent, calling evidence from Stephen James Whitfield, the Departmental Registered Valuer now accepting responsibility for the valuation, which was initially undertaken by another valuer, who is no longer available to defend the valuation. At the request of both parties, the Court undertook an inspection of the Heronvale locality and sales.
The Evidence:
(1) The Nature of the Land -
The island was first settled in the 1880s, and was originally used as a site for a meat freezing plant. The island is an open plateau formation in the north-east, surrounded by rocky cliffs, and gently sloping to low grassy depressions in the south- east, merging to scrubby coastal forests. The eastern, southern, and south-western foreshore is a narrow coral beach bordered by mangroves. At low water king tides, there is occasional vehicular access across the sand spit, although that is restricted to about 12 times per year.
Doctor Rosanove argues that on occasions severe damage has occurred by
vandals who have driven to the island during those low tides. He argues that because
of that occasional accessibility, Poole Island is not afforded the same total privacy
usually available on comparable off-shore islands. However, he concedes that the occasional vehicle access to the island could be a benefit should further developments be contemplated. He also agrees that vandalism could also occur to properties on the
| mainland. |
The appellant currently obtains access by boat to the island from a boat shed on another property he owns in Heronvale, located about 200 metres south-east of the Brisk Bay settlement. However, boat access is difficult during windy weather, due to the predominance of edging coral reefs. Doctor Rosanove agrees that the attraction of Poole Island, compared to mainland properties, is its potential seclusion and privacy. However he argues that such seclusion comes at a price in terms of ready access to the mainland. For that reason he sees the market for purchasers as very restricted, and virtually not suitable for regular commuters to mainland centres.
(2) . Comparison of Sales - To support his valuation, Mr Whitfield relies upon the following sales:
• Sale 1 - (Green Island, off Mackay - Lot 129 on Plan C1513)
This is an island containing 24.89ha located about 1.5 to 2km offshore within walking distance from Shoal Point, a suburb of Mackay. At the time of sale the island was vacant, although a new dwelling has subsequently been constructed, The sale is seen as vastly superior. The sale was sold in August 1994 for $450,000.
• Sale 2 - (Titan Island - Lot 3 on Plan HR2024)
This is a 2,023 square metre island located very close to Dent Island, and between Dent and Hamilton Islands in the Whitsunday Passage. The sale was improved with a substantial dwelling and shed/workshop, and is seen as vastly superior to the subject land.
The sale sold in January 1997 for $855,000, and after allowing for the improvements was analysed at $500,000.
• Sale 3 - (Part of Clairview Island - Lot 3 on RP 889520)
This is a 51.99 hectare freehold title part of Clairview Island, which is located off-shore of the Town of Clairview, about 120km south of Mackay. Clairview is about half way between Rockhampton and Mackay, and the island is separated from the mainland by mangrove swamps and sandfly creeks. Costs of any development access road would be very costly, and the island remains undeveloped. Clairview Island was subdivided into five parcels many years ago, and there is no exclusive ownership of the island in the sale, which is more remote than the subject land, and is seen as inferior to the subject land. The sale sold in January 1997 for $85,000.
• Sale 4 - (Corner White and Anderson Avenue, Brisk Bay - Lot 1 on Plan H9414)
This is a 592 square metre vacant residential parcel located on the esplanade, with very good ocean views across the bay to Gloucester Island and Bowen. There were no services connected to the parcel at the date of sale. The sale is seen as evidence of a good residential site with good views of the ocean in the Brisk Bay area, the nearest mainland to Poole Island. The sale is seen as inferior to Poole Island, due to the exclusive privacy of the subject. Poole Island is covered by a special lease, the conditions of which restrict its use to single residence purposes, similar to each of the four sales compared.
Sale 4 sold in November 1995 for $85,000 which, after allowing for clearing, was analysed at $84,500.
Mr Whitfield argues that there is a small market for exclusive islands for residential purposes, now more scarce since the Government has restricted further freeholding of off-shore islands.
Dr Rosanove argues that the value adopted for Sale 4 is inconsistent with other
lands sold in Pitcairn Avenue, Brisk Bay, in November 1999. He provides evidence
of a letter from a real estate agent disclosing the sale of four contiguous parcels which
sold for a total price of $22,500. Doctor Rosanove also notes that currently there are 12 lots for sale in Brisk Bay, and sales are hard to achieve. Doctor Rosanove also argues that the market has fallen since 1996.
Mr Whitfield rejects those comparisons as reflecting comparable lands to the subject land. He notes that the parcels noted by Doctor Rosanove (Lots 409 to 412) in Pitcairn A venue, are well removed from the esplanade, with no ocean views. Mr Whitfield notes that since 1996 there have been 10 to 12 sales of vacant lands in Pitcairn Avenue, which sold between $16,000 and $38,000. Mr Whitfield argues that the presence of uninterrupted ocean views can increase the value of land parcels by up to four times the value of inland parcels. The inspection supports that the views from Sale 4 are very good, while there are virtually no ocean views from Lots 409 to 412.
(3) Relativity -
In seeking a fair relativity between Poole Island and other lands, Doctor Rosanove refers to lands which are the subject of special leases in other parts of Queensland, noting the wide variation in the applied rates per hectare. However those comparisons provide little specificity, and make no allowance for the different land
| types, area or location, and are therefore of no assistance in this matter. |
Doctor Rosanove provides a more direct comparison with the parcel he owns (five residential lots) located about 200 metres south-east of the Brisk Bay settlement. It is his evidence that those lands are collectively valued as unimproved lands at $375,000 (i .e. 5 lots @ $75,000 per lot). The inspection confirmed Doctor Rosanove's evidence that those parcels have no direct views of the ocean due to heavy vegetation. However it is noted that similar parcels east of those five parcels, have selectively cleared the timber to the water's edge, and do benefit from ocean glimpses. Adopting the value of Sale 4 ($85,000) as a comparison, the unimproved value of the five parcel lot at $375,000, may not be out of line with the market. Certainly Doctor Rosanove's five lots bear little direct comparison with Lots 4Qg- to 412 in Pitcairn
Avenue.
Decision:
In determining the unimproved value of the subject land, Mr Whitfield is required under section 14 of the Act to value the subject land as if it were freehold land:
"14.(1) For the purpose of deciding the unimproved value of land that is not granted in fee simple, the land is taken to be granted in fee simple.
(5) In making, under this part, the valuation of the unimproved value
of any land-
the unimproved value of that land shall be determined having regard to and making proper allowance for any restriction or limitation of use having regard to the purpose and conditions to which that permit, lease, licence permission to occupy or agreement is subject. "
The meaning of "unimproved value" is defined by section 3 of the Act, which follows guidance provided by the High Court of Australia in Spencer v. The Commonwealth of Australia (1907) 5 CLR 418, where Griffith CJ said at page 432:
"In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e. whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?' It is, no doubt, very difficult
conjectural. The necessary mental process is to put yourself as far as to answer such a question, and any answer must be to some extent possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together."
In respect of the nature of the land, there is agreement between the parties that
access to Poole Island is difficult, and the island is most likely to attract a select range
of potential purchasers who seek privacy. Because of the limited availability of
offshore islands which provide an exclusive residential location, in my opinion,
normal supply and demand forces are likely to ensure that the value of Poole Island is at a level higher than a mainland residential site with direct esplanade frontage and good ocean views, such as Sale 4.
(1) Comparison of sales -
While it is agreed by Mr Whitfield that direct comparisons are difficult, the range of sales provided by him reflects the broad spectrum of that select market. I would agree with Mr Whitfield that his Sales 1 and 2 are vastly superior to the subject land, and provide little direct comparison. The key therefore to any comparison lies with his Sale 3, and to a lesser extent to his Sale 4.
If I then consider Mr Whitfield's Sale 4, I note that parcel has comparable ocean views to the subject, and has vastly superior access to the site. However it does lack the exclusive privacy afforded by Poole Island, and it is vastly smaller in size. In seeking whether Sale 4 was perhaps out of line with the market for esplanade fronting lots, I get little assistance from any comparison with Lots 409 to 412 in Pitcairn Avenue. The market constantly demonstrates that vendors pay considerably more for lands with ocean views. The sale of other parcels in Pitcairn Avenue up to $38,000, and which are likely to have at most only limited views of water due to their distance from the esplanade, also suggest that $85,000 for Sale 4 may not be excessive. On the evidence I would agree with Mr Whitfield that Poole Island was likely to have a value greater than $85,000.
If I then tum to Sale 3, I note that Clairview Island demonstrates an offshore residential location with difficult access. Its further location from a major centre
($85,000) which, as a single residence site, has a comparable size to the subject land. (120km) would suggest that Poole Island would also have a higher valuer than Sale 3
On the evidence therefore I can accept that Poole Island has an unimproved value greater than $85,000. The question then remains by how much more is Poole Island to be valued. Doctor Rosanove discredits the sales provided, but provides no other sales of off-shore islands to support his claim. The relativity argument as noted previously provides little further assistance.
In seeking determination of the final unimproved value for Poole Island, I note that the onus to prove his case in this matter lies with the appellant under section 45(4) of the Valuation of Land Act, which states when referring to a notice of appeal:
"45.(4) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner."
I also note that unless the Chief Executive has been found to have applied a wrong principle or made a serious error, then section 33 of the Act directs that the Chief Executive's valuation is deemed to be correct. That was identified by the High Court of Australia in Brisbane City Council v. Valuer-General (1977-78) 140 CLR 41, where Gibbs J said at page 56:
"The question then is whether a court on appeal is bound to accept the Valuer-General's figure as correct unless it is positively established that the true value is lower, or whether it is enough to show that the value was reached as the result of an error in principle. 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. "
On those principles I believe the appellant has failed to prove his case, and the valuation by the Chief Executive has not been effectively challenged.
In his final address Doctor Rosanove argues that, in his opinion, the current method of leasing of State lands, and the application of realistic rating charges by local governments, both need to be reviewed. While that philosophy may be seen by Doctor Rosanove as a solution to his concern with rising charges by both of those authorities, it has little impact upon the current matter, which is directed at determining the unimproved value of Poole Island. That is the purpose of the State legislation directing this Court.
| Many of the concerns of Doctor Rosanove were previously examined by then overall State Valuation System, which was created by the Valuation of Land Act | Sheehy was commissioned under the Review of Valuation Act 1952 to examine the Justice Sheehy in his review of the State Land Valuation System in 1953. Justice |
| 1944. Prior to 1944, valuations had been undertaken separately by individual local authorities. In introducing the new Bill in 1944, the Minister noted: |
"At the present time there is no uniform system of valuation. Unimproved values in some areas are high whilst in others they are low and it is our intention to introduce a uniform system of assessing the
unimproved value of land. " (Hansard, 5 September 1944, page 307). In his review of the State Valuation System in 1_953, Sheehy J noted at page
10:
"The following pattern emerges from the whole evidence: - (1) The total valuation was fair in the sense referred to, i.e. 'reasonable'. (2) The valuation was inequitable in certain cases in the sense that the apportionment of the basis of liability for rates and taxes was not just as between the individual ratepayers and taxpayers. "
Amongst problems highlighted by Sheehy J was an inconsistency in relativity between parcels, particularly anomalies arising from a lack of co-operation between valuers charged· with valuing different geographical areas. The current processes adopted by the Chief Executive have been designed to avoid such parochialism, and generally avoids the serious anomalies which were occurring previous to the 1944 Act, when the valuation process did not take a "whole of State" perspective. (See
| Report of the Board of Review on | Valuation Act 19 5 2). |
In the matter of realistic rating charges, I note that is determined under Part 5
of the Local Government Act 1993, and is not a matter for consideration in this
matter.
Conclusion:
Having considered the whole of the evidence, I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value of Lot 54 on Plan HR735 as determined by the Chief Executive at $124,000 is affirmed.
(NG Divett)
Member of the Land Court
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