Rowles and Valuer*General
[2005] WASAT 325
•18 NOVEMBER 2005
ROWLES and VALUERGENERAL [2005] WASAT 325
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2005] WASAT 325 | |
| VALUATION OF LAND ACT 1978 (WA) | |||
| Case No: | DR:9/2004 | 28 APRIL 2005 28 JULY 2005 | |
| Coram: | MR P McNAB (MEMBER) | 18/11/05 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | 1. The application for review is dismissed 2. The decision under review is affirmed | ||
| B | |||
| PDF Version |
| Parties: | GRAHAM ROWLES VALUERGENERAL |
Catchwords: | Valuation of land Rural land Unimproved value of small farmholding Challenge to methodology, assumptions and data used by the ValuerGeneral No expert evidence called in rebuttal Alleged anomalous increase from previous years "Valuer's art" Tribunal satisfied that practice and law of land valuation followed Tribunal accepted expert evidence of valuer Application for review dismissed |
Legislation: | Valuation of Land Act 1978 (WA), s 4, s 17(4), s 19, s 21, s 26(4)(b), s 32 |
Case References: | Duffy v Minister for Planning [2003] WASCA 294 Lake Karrinyup Country Club Inc v Valuer-General (Unreported, Supreme Court of WA, Parker J, Library No 960515, 13 September 1996 [BC9604209]) Wines and The Valuer General [2005] WASAT 263 Nil |
Orders | 1. The application for review is dismissed.,2. The decision under review is affirmed. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : VALUATION OF LAND ACT 1978 (WA) CITATION : ROWLES and VALUERGENERAL [2005] WASAT 325 MEMBER : MR P McNAB (MEMBER) HEARD : 28 APRIL 2005
- 28 JULY 2005
- Applicant
AND
VALUERGENERAL
Respondent
Catchwords:
Valuation of land - Rural land - Unimproved value of small farmholding - Challenge to methodology, assumptions and data used by the ValuerGeneral - No expert evidence called in rebuttal - Alleged anomalous increase from previous years - "Valuer's art" - Tribunal satisfied that practice and law of land valuation followed - Tribunal accepted expert evidence of valuer - Application for review dismissed
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Legislation:
Valuation of Land Act 1978 (WA), s 4, s 17(4), s 19, s 21, s 26(4)(b), s 32
Result:
1. The application for review is dismissed
2. The decision under review is affirmed
Category: B
Representation:
Counsel:
Applicant : Selfrepresented
Respondent : Mr J Clark
Solicitors:
Applicant : Self-represented
Respondent : N/A
Case(s) referred to in decision(s):
Duffy v Minister for Planning [2003] WASCA 294
Lake Karrinyup Country Club Inc v Valuer-General (Unreported, Supreme Court of WA, Parker J, Library No 960515, 13 September 1996 [BC9604209])
Wines and The Valuer General [2005] WASAT 263
Case(s) also cited:
Nil
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Summary of Tribunal's decision
1 This application for review concerned the unimproved value of a small farming property near Northampton. The Valuer-General valued the property as at 1 August 2003 (the relevant date for valuation purposes) as worth not less than $62 500 in its unimproved state. The owner, Mr Rowles, objected to this valuation estimating that $53 400 was a better valuation.
2 The applicant declined to call any expert valuation evidence of his own but robustly challenged, amongst other things, the methodology, assumptions and data used by the Valuer-General. Mr Rowles was particularly concerned with an apparent anomaly when the valuations of his property for the immediately preceding period of two years were significantly lower than the current valuation.
3 The Tribunal did not accept any of Mr Rowles' challenges and criticisms, and dismissed his application for review. In particular, the Tribunal accepted the oral and written expert evidence of the Valuer-General's witness.
4 The Tribunal was satisfied that the valuation was reached consistently with the law and practice of land valuation, and that there was sufficient material to justify the original valuation as at 1 August 2003.
5 The decision under review was affirmed.
Introduction: the land the subject of the review
6 Mr Rowles (applicant) is the registered proprietor of lot 3157, Isseka Road, in the Shire of Northampton, being land more particularly described on Certificate of Title Vol 1846 Fol 126 (land) some 15 kilometres from Northampton. Mr Rowles purchased this rectangular-shaped parcel of approximately 63 hectares (this figure appears on the title) in February 2003 for $300 000.
7 This figure of 63 hectares has been used in these reasons to this point, although the true figure has been recently recalculated and corrected to a figure of approximately 68 hectares, the discrepancy being administratively resolved for the applicant's benefit in the final hearing. In any event, the respondent's valuations were all done on the larger figure, as their database did not reflect the figure shown on the title.
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8 The Valuer-General considers that the land is used as "a lifestyle-type property" given its locality and size ("an attractive, lifestyle lot with red loam, creek and steep hills"). Mr Rowles appears to concede that at least the southern half of his property – the relevantly valuable portion, in his view – could be described as a "hobby farm".
Overview of the proceedings
9 The applicant has sought a review in this Tribunal of a determination by the Valuer-General (respondent) of the unimproved value of the land for the 2004 assessment (the date in force being 30 June 2004, see below) in the sum of $62 500. However, as appears below, the actual date of valuation is 1 August 2003. He claims that the valuation or assessment of $62 500 as at that date has been incorrectly arrived at, and then in an amount which is too high. Mr Rowles estimates that a sum of $53 400 would be a more accurate assessment of the land's unimproved value.
10 Mr Rowles was mainly concerned about an increase "of almost 25%" in assessed values from 2002 to 2004. Indeed, an extract of the "Rural Unimproved Valuation Roll" in evidence, shows corresponding valuations for the subject land for 2003 in the sum of $50 500 and for 2002 in the sum of $56 000.
11 Thus, his principal argument seeks in effect to challenge, or to exploit, the alleged anomaly of a decrease in assessed value from 2002 to 2003 followed by an increase in the following year, which has, of course, directly affected him.
12 However, he also argues that the assessments of his land in terms of its proportion of arable land, grazing land and rocky outcrops is incorrect. He says that in reality, the northern half (which contains a rocky outcrop) has little or no value, while the southern half – as a small farm – does have relevant value but is affected by factors such as drought. Further, he argues that the comparator properties chosen by the respondent to support the valuation are not sufficiently or relevantly comparable.
Valuation and objection
13 Presumably, – cf Wines and The Valuer General [2005] WASAT 263 at [13] – the objection by Mr Rowles arises out of the determination by the Valuer-General of the unimproved value of the land arising out of a general valuation for the State of Western Australia, which valuation came into force on 30 June 2004 (see s 17(4) [whole of State valuation district] and s 21 [requirements for notice] of the Valuation of
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- Land Act 1978 (WA) (the Act) and the corresponding gazette notice of 9 July 2004: Government Gazette at page 2787). That notice fixed 1 August 2003 as the date of valuation: see s 19.
14 Thus, in 2004, Mr Rowles would have received an assessment for a rate or tax with a date of valuation of 1 August 2003. According to the respondent, in this case the valuation was adopted by the Shire for 1 July 2004 (that is, for 2004 – 2005): see the respondent's letter to the applicant dated 23 November 2004 setting out the operative dates of 1 August 2003 and referring to the associated fiscal year for the Shire as 2004 – 2005.
15 Mr Rowles objected to that assessment in December 2004 before the former Land Valuation Tribunal. That appeal devolved upon this Tribunal, as successor body to that Tribunal. After directions, an initial hearing, further directions and a further hearing, the matter was concluded in late July 2005.
16 In light of both the relatively narrow issue to be decided and the abundant photographic evidence, the Tribunal declined an invitation issued by the applicant for the Tribunal to visit and inspect the subject land.
Statutory framework
17 It is necessary to refer briefly to some of the statutory background to the review, as follows.
18 The Tribunal understands, first, that it is not in dispute that Mr Rowles is "a person liable to pay any rate or tax assessed in respect of land who is dissatisfied with a valuation of such land made under [the Act]" within the meaning of s 32 of the Act. Secondly, the valuation of land is by way of the respondent determining the "unimproved value of the land" (cf s 26(4)(b) of the Act dealing with particulars of rateable land on "valuation rolls"; here, as mentioned above, the "Rural Unimproved Valuation Roll" is in issue). See also the definition of "value" and the corresponding expressions in s 4 of the Act.
19 Finally, it is not in dispute that Mr Rowles has properly objected to his valuation within the meaning of Part IV of the Act. It is also common ground that his application for a review of the Valuer-General's decision has been properly brought under Part IV of the Act.
(Page 6)
20 However, the meaning or perhaps more accurately, the practical application of some of the following definitions, particularly the first one set out below, in s 4 of the Act is in effect contested by the applicant. These definitions are:
" 'unimproved value' [which in this case] means …the capital amount that an estate in fee simple in the land might reasonably be expected to realize upon sale …
'improvements'in relation to land means the value of all works actually effected to land, whether above or below the surface, and includes fixtures, but does not include … machinery, whether fixed to the land or not …
'land'means lands, tenements and hereditaments, and any improvements to land, and includes any interest in land …"
Valuer-General's valuation methodology
21 As is apparent from the definitions set out above, the hypothetical sale of the subject land is the premise of the respondent's task. In Lake Karrinyup Country Club Inc v Valuer-General (Unreported, Supreme Court of WA, Parker J, Library No 960515, 13 September 1996 [BC9604209]) the Court said (BC9604209 at page 20):
"It was common ground before me that the definition [in the Act], especially by the words '... amount that ... the land might reasonable [sic] be expected to realise upon sale ... ', directed attention to the market value of the land. Subject to the express modifications provided in the definition, it was … common ground that the market value in this sense was aptly determined in accordance with the long settled principles enunciated in decisions such as Spencer v Commonwealth of Australia (1907) 5 CLR 418 which, particularly at 432, 436 – 437, 440 – 441, postulated a hypothetical prudent purchaser on the date for valuation and directed attention to what such a purchaser would have to pay to purchase the land for the most advantageous purpose for which it was adapted in a process of voluntary negotiation with a hypothetical vendor who was willing to sell, both purchaser and vendor being perfectly acquainted with all circumstances relevant to the value of land and neither of them being so anxious to trade that they would overlook any ordinary business consideration."
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22 In his evidence, Mr Clark, who is a Senior Valuer – Rural for the respondent, confirmed that comparable sales was the method adopted. He inspected the subject land himself, after Mr Rowles' objection was made in November 2004. There is no question that Mr Clark, who has had over thirty years experience in valuing rural land, is entitled to be treated as an expert witness. He said in his oral evidence:
"[We have a] valuation by comparable sales, which [is when] we try and look at a number of sales and generally try and look for those that have the least amount of improvement on, because we do have to work back to the unimproved value. Ideally, we would look at bush sales, but they are few and far between. There are a couple of them in the evidence that we have here, but other than that, it's analysing from the … lighter improved sales."
23 At this point, it is convenient to refer to certain useful passages of the Full Court in Duffy v Minister for Planning [2003] WASCA 294; see McLure J (with whom Anderson J and Steytler J agreed) at [22] – [33]. These passages are reproduced at length in Wines and the Valuer Generalat [22], and it unnecessary to reproduce them here. In summary, those principles make it clear that a transparent methodology adopted by an expert valuer (that is, one that applies the accepted principles of their profession, as informed by the common law) in the context of the "valuer's art" is in effect prima facie evidence of the relevant value of something.
24 Despite the Tribunal's exhortations to the applicant, and an adjournment for that purpose so that he could obtain expert evidence, the applicant declined to produce any expert evidence to rebut Mr Clark's evidence. He did however, extensively attempt to cross-examine Mr Clark on his data, assumptions and methodology.
25 According to Mr Clark, the valuations are done en masse (by way of "mass appraisal") and properties are not individually inspected in the usual course; however, "as many sales as [they] can" are considered to "give a good indication in the [relevant] area" (emphasis added). Mr Clark's evidence was that a computer program is used whereby "charts" of relevant factors such as location, rainfall, soil grades, size, ocean frontage and river views are fed into the exercise. Reports have been received into evidence which summarise or reflect the result of those efforts.
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26 The evidence is that an administrative process takes place that integrates and validates these various data collections to produce an official valuation, a process finalised by an officer and not a computer.
27 In the present case Mr Clark also supports the valuation thus reached by reference to such external validating data as:
• The "compound increase" of assessed unimproved value for the subject land from 1997 to 2004 at 3.2% (that is, 3.2% per annum).
• The rural value data ("Rural Value Watch") produced by his organisation showing a comparative compound increase of 3.3% over the same period.
• An analysis of Mr Rowles' sales price breakdown for the subject land (on the figures supplied by Mr Rowles) which showed a land value component, less improvements of $65 000. The precise figures are set out in his witness statement and it is unnecessary to reproduce them here, except to note that Mr Rowles "categorically" denied that they were his figures. (Mr Rowles' alternative breakdown appears on a letter that he wrote to the respondent in November 2004, which is where his figure of $53 400, referred to above, appears.)
29 Thus, the data at face value seems to indicate that no decrease in the property market took place, contrary to what the earlier valuations (for 2002 – 2003) might have suggested.
30 In addition to supporting the current valuation, Mr Clark used this evidence to argue that the reduction in unimproved value that took place between 2002 and 2003 (see above) was an error. He said that, in his opinion, he disagreed with the reduction which was the result of another mass appraisal supervised by a different valuer. In any event, in his view it did not relevantly affect the question to be decided here concerning the unimproved value as at 1 August 2003.
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31 In addition, there is certain comparative data relating to nine identified properties mostly within a 35 kilometre radius of the subject land.
32 That list came into existence after the event, but it is admissible to support the respondent's case. It is unnecessary to reproduce that list in these reasons, or the brief written commentary that went with it which appears on the witness statement. Suffice it to say that that list has been used by Mr Clark to show that, in his opinion, broadly equivalent properties exist which when analysed or adjusted appropriately in respect of their (mostly recent) sales data, either demonstrate support for, or do not relevantly contradict, the valuation under review. Moreover, in his view they more or less dovetailed with the three other sets of data set out above to support the valuation under review.
33 Mention should also be made of a second list showing 31 other properties, the sales details of which were queried by Mr Rowles, and in respect of which details, where available, were voluntarily supplied to Mr Rowles by the respondent. Mr Clark saw nothing on that list that would cause him to doubt the opinion that he had otherwise reached.
34 The Tribunal received that whole document in the respondent's case, over Mr Rowles' objections. One of those properties (No 16 on that list, known as the "Frosty Gully Road" property, comprising approximately 65 hectares, but which is located further from town than the subject land) was however singled out by Mr Clark in support of his valuation as it was sold in August 2003 in a "totally unimproved" state for $55 000.
35 At the recommenced hearing, Mr Rowles' point was that there was significantly more arable land than on this property than on his property and that it was not in a bush state but was in fact a "plantation". Mr Clark said that he had spoken to the owner and looked at an aerial photograph of the land. At the second hearing, without any witness statement or other notice or leave, Mr Rowles attempted to cross-examine Mr Clark by video link with photographs of the property, photographs solely available at his end of the video link, placing the Tribunal and the respondent in a difficult situation. Mr Rowles' main reason for not advising the Tribunal or the respondent of this development was that he "did not trust the Valuer-General's Office to deal with this correctly" (T23: 28.7.05).
36 The Tribunal expressed reluctance to further adjourn the hearing but permitted some cross-examination on the issue to take place. Again, without leave and after the hearing, and after the matter was reserved for
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- decision, Mr Rowles lodged those photographs with the Tribunal. They have not been received into evidence.
37 In light of the findings made by the Tribunal about the abundance of other evidence in this case supporting the respondent's case, it is in the event unnecessary for the Tribunal to make any findings on the status of this particular property.
38 It is perhaps important to reaffirm at this point that in this case it is clear, and it is of course not unusual in such cases, that essentially the valuer has made an impressionistic judgment of value (in a context informed by certain well established principles, grounded upon experience and some comparative and certain base data) based upon the relevant worth of the property taken as a collective or aggregate entity, particularly as to its size, location and attractiveness to purchasers like Mr Rowles.
39 Thus, on the evidence received so far, the respondent has in accordance with the principles already alluded to, in effect established a prima facie case supporting the assessment under review.
The cross-examination of Mr Clark by Mr Rowles
40 The combined transcript of the first and second cross-examination of Mr Clark by Mr Rowles runs to over 50 pages. The Tribunal does not intend to summarise each and every aspect of that cross-examination. The thrust of Mr Rowles' questions was in effect directed at unravelling (or perhaps understanding) the "valuer's art", or otherwise attempting to establish doubt (see his case below), or alleged administrative inconsistency or possibly, even bad faith on the part of the respondent. A major focus of the questions was, as appears above, the reduction by a predecessor of Mr Clark in the unimproved value in the period immediately before this period under review. (Consistently with the theme just alluded to, in his final address to the Tribunal, Mr Rowles referred to this as "part of an attempt to cover up an unfortunate, initial error" T50: 28.7.05). Mr Clark's straightforward evidence on this matter is set out above; it has not been rebutted by any expert evidence. The cross-examination of the witness in relation to the Frosty Gully property has already been dealt with above.
41 It is difficult to see, given the relatively narrow issue to be decided here, how relevant some of this cross-examination was. Nevertheless, procedural fairness dictates that the applicant be permitted to fairly and fully agitate his case, which has occurred.
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42 Having said that, however, the assumptions of the applicant often bore no relationship to those of the expert valuer or, for that matter, to common experience. Thus, for example, at one point Mr Rowles apparently refused to accept that an aesthetic judgment ("aesthetic attraction", at T55) could substantially influence either a purchaser or the calculation of the value of the property in its natural state, when considered as a whole, an assumption that must be considered as plainly wrong. It is true that later in his own evidence, he qualified his argument somewhat on this point (see T68), but that indicates, amongst other things, an unhelpful and confusing cross-examination of the respondent's witness.
43 In the Tribunal's view, none of his aims, with all respect to the applicant, was in the least bit achieved by his cross-examination and the Tribunal remains satisfied that the respondent has fairly attempted to explain in a convincing, rational and transparent way why as at 1 August 2003, the subject land was in its unimproved state worth at least $62 500.
Mr Rowles' case
44 Mr Rowles produced the following documentary material which was received by the Tribunal:
• Data from the Bureau of Meteorology concerning the monthly water rainfall data relating to the area of the subject land for the period 1915 – 2004, the average fall being 480 millimetres over that period (for 2003 the total was 489 millimetres, but in 2001 it had fallen to 387 millimetres).
• A list of properties with sale prices compiled from the respondent's data, 32 of "which could be relevant to [his] appeal", which document formed the basis of a request to the respondent for further information (April 2005).
• An aerial photograph of the subject land and some recent colour photographs of parts of the land.
• A real estate leaflet extolling the virtues of the subject land (for example, "with panoramic views") from 2001, offering the property with a residence and other improvements for $345 000.
• A real estate sales document relating to a neighbouring property soliciting offers for the property at $295 000.
• His own witness statement/submission which emphasises the lack of surrounding services and access to town facilities; that the property was on the market for some three years before he
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- purchased it; that small farms were not selling well; that he has limited arable land, with water and other problems.
45 Most of this material was put directly or indirectly to Mr Clark, but none of it caused him to resile in any way from the central tenet of his professional opinion that as at 1 August 2003, the unimproved state of the land was worth at least $62 500. In the Tribunal's view, on the face of it, none of this material undermines that opinion.
Summary and conclusions
46 In this case, the difference between the professional valuer's expert opinion as to the unimproved value and that of the applicant is a sum of $9 100. The applicant declined to call any expert evidence to rebut the valuer's opinion. The Tribunal has carefully reviewed and considered Mr Rowles' arguments, but it is not persuaded by them. There is an abundance of evidence to support a finding by the Tribunal that not only was a relevant, standard process of valuation followed, but that there existed sufficient valuation data upon which an expert opinion could be expressed.
47 The Tribunal finds that the applicant has not made out any case to impugn either the process of valuation or assumptions and data underlying it. Consequently, the expert evidence stands in support of the respondent's case. The decision under review, namely to assess the unimproved value of the subject land as at 1 August 2003 in the sum of $62 500, is therefore affirmed.
Orders
1. The application for review is dismissed.
2. The decision under review is affirmed.
I certify that this and the preceding [47] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR P McNAB, MEMBER
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