Scott v Valuer-General (No. 2)
[2013] QLC 22
•21 May 2013
LAND COURT OF QUEENSLAND
CITATION: Scott v Valuer-General (No. 2) [2013] QLC 22 PARTIES: Walter Scott and Agnes Georgina Scott
(appellants)v.
Valuer-General
(respondent)FILE NO: VLA220-10 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under Valuation of Land Act 1944 DELIVERED ON: 21 May 2013 DELIVERED AT: Brisbane HEARD ON:
6 and 7 February 2012, 27 March 2012; 28 November 2012
HEARD AT: Nanango and Brisbane MEMBER: PA Smith ORDER: The appeal is dismissed.
CATCHWORDS: Valuation – Factors in valuation – relativity – Presumption in favour of correctness of valuation – Valuation of Land Act 1944
Valuation – Valuation Evidence – Sale of unimproved or lightly improved comparable properties the best evidence – market valuations falling well outside the valuation period of little assistanceLand Valuation Act 2010
Valuation of Land Act 1944
Vegetation Management Act 1999APPEARANCES: Mr Peter Douglas Scott represented the appellants
Ms Lyndi Hawkings-Guy, Principal Lawyer and Mrs Thea Johnson, for the respondent
This is an appeal by the appellants against a valuation by the respondent, pursuant to the Valuation of Land Act 1944 (VLA) which valued the appellants’ property situated at 110 Haynes Kite Millar Road, Blackbutt in the sum of $285,000 as at 1 October 2009. The appellants contended for a valuation of $117,028.
The land has a total area of 94.72 ha and is comprised of two lots, being Lot 112 on Plan CSH1676 and Lot 113 on Plan CSHS542. The subject property is located approximately 3 km south south west of Blackbutt. Access is via sealed, earth and gravel roads. For most of the year the access is good, however problems can be encountered in adverse weather conditions. While electricity and telephone are available to the property, there are no town water supplies, garbage collection or mail delivery.
Blackbutt is a relatively small rural township providing basic services including churches, hotel, service stations, primary school and limited retail shopping and offices. The subject property is mostly cleared open forest grazing with an agricultural scrub influence. The subject is used for grazing cattle. The vegetation management issues pursuant to the Vegetation Management Act 1999 impact 8.7 percent of the land. The land is zoned rural.
The appellants[1] were represented by their son, Mr Peter Scott, who gave evidence at the hearing. They also called evidence from a registered valuer, Mr Bradley Volp. Mr Peter Scott has no legal or valuation qualifications. The respondent was represented by Ms L Hawkins-Guy and Mrs T Johnson, both legal officers employed by the respondent, and relied on evidence of a registered valuer, Mr Peter Mariner. As part of the hearing, which was held in Nanango and Brisbane, a view was undertaken of the subject property and other properties referred to in the evidence.
[1] Tragically, during the course of the hearing of this matter, the appellant Walter Scott passed away.
Relevant legislative provisions
Pursuant to s.13 of the VLA, the respondent is required to determine the unimproved value of the land. Relevantly, s.3(1) of the VLA[2] says as follows:
“3 (1) For the purposes of this Act –
unimproved value of land means –
(a) in relation to unimproved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require; and
(b) in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.”
[2] As in force on 1 October 2009.
I note that the subject land in this matter is improved. Accordingly, put simply, the task is to find the market value of the land on the assumption that none of the improvements are on the subject land. An assessment is then undertaken as to the highest and best use of that land.
As then President Trickett said in Fairfax v Department of Natural Resources and Mines[3] at paragraphs 11 and 12:
[3] [2005] QLC 11.
“[11]The principles for determination of the 'market value' of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 441).
[12]It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that:
‘Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but – as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales.’ ”
I respectfully agree with these observations.
Presumption of correctness of valuation
I now turn to s.33 of the VLA, which states as follows:
“33 Status of valuation
Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.”
This section was considered by the High Court in the case of Brisbane City Council v The Valuer-General for the State of Queensland[4] where Justice Gibbs (as he then was) made the following observation at page 56:
“…
In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s. 13(7) is rebutted.”
It should be noted that s.33 of the VLA is in essentially the same terms as what was then s.13(7) of the Act.
[4] 1977-78 140 CLR 41.
It is perhaps unfortunate for the appellants in this matter that their appeal is being conducted as one of the last matters to be heard under the now repealed VLA as opposed to the Land Valuation Act 2010 (LVA) which replaced the VLA. For reasons which will become obvious later in this decision, the statutorily imposed presumption of correctness of the valuation under the VLA is decisive in this matter. By contrast, the LVA does not contain a provision like s.33 of the VLA, but rather provides in s.169(3) of the LVA that the appellant has the onus of proof for each of the grounds of appeal. As I have pointed out in a number of decisions,[5] the consequence of dropping the concept of the valuation being statutorily deemed correct, is that there is now a more even playing field as between appellants and the respondent when appeals are heard under the LVA in this Court.
[5] See, for instance, Meiers & Anor v Valuer-General [2012] QLC 19 and Lawson v Valuer-General [2012] QLC 27.
Grounds of appeal
The grounds of appeal are set out in Exhibit 1. Although they are quite extensive, they fall under three discrete headings:
·The unimproved land valuation is not supported by property sales;
·The unimproved land valuation does not reflect the physical characteristics of the land or the legal, zoning or market based constraints on the use of the land; and
·Other grounds, including special circumstances due to the age of the appellants, the economic consequences of the appellants’ not being entitled to an old age pension, the limited water supply and physical carrying capacity of the property, and the uneconomical local government rates which flow from the unimproved valuation.
During evidence-in-chief, Mr Peter Scott summarised the appellants’ grounds of appeal in the following way:[6]
“Your Honour, the appellants bring the matter before the Court on three basic grounds. Those being: number 1, the unimproved land value is not supported by property sales; two, the unimproved land valuation does not reflect the physical characteristics of the land, or the legal zoning or market-based constraints of the use of the land. In addition, the Valuer-General has failed to demonstrate the means by which the unimproved land value of the subject property was determined; and the unimproved value of the subject property has no relativity to other properties of similar type and use located within the South Burnett Regional Council area and the adjoining Toowoomba Regional Council area. … Three, the other grounds relating to economic impact. … Unimproved land valuations therefore have the capacity to impact adversely on smaller properties which may, in certain circumstances due to limited agricultural or pastoral capacity, have a direct impact on the economic viability of a particular property. Given the limited carrying capacity of the subject property, relatively fixed or falling cattle prices, the subject of the property's limited and restricted access roads to which this day remains almost impassable due to flood damage in 2010, and the lack of constraint - the lack of constant and reliable water source, dictate that financial returns cannot be increased beyond their present capacity. … The increased rate bill is a direct result of inappropriate and unsupported unimproved land valuations. … The strongest component of our appeal, your Honour, is the lack of comparable relativity to the subject property's unimproved land value to that of the properties of similar type, capacity, and market value. We can also demonstrate that the subject property is so vastly inferior to a property located at Goodger, a district in the same Local Government area, that is superior in all aspects, yet the subject property is valued at more than 30 per cent higher - and, your Honour, you'll note that we did visit that property during our inspection tour. In addition, during our property inspections we showed the Court a property which has an unimproved land value of $3,081 per hectare and is vastly superior in every aspect to the subject property. This direct comparison of the subject property with a property which is similarly valued yet described as one of the best, if not the best, farming property in the South Burnett clearly demonstrates that the Valuer-General has been less than diligent in his application of unimproved land values, particularly as it relates to the subject property.”
Assessment of witnesses
[6] See Transcript 3-6 to 7.
As already indicated, the appellants’ son, Mr Peter Scott, represented the appellants at the hearing and also gave evidence by way of statements[7] as well as oral evidence. It is clear from the evidence that Mr Peter Scott has a close, lifelong association with the subject land of about 60 years. The Scott family have been landholders in the South Burnett region since European settlement. Mr Peter Scott impressed me as a passionate witness with a deep knowledge of the country types; soil types; carrying capacity; and other related primary production based knowledge of both the subject property, other properties owned by the Scott family, and indeed properties throughout the surrounding districts. I accept his evidence insofar as such evidence relates to questions of fact as to the primary production capabilities of the subject and related blocks. However, it does not follow that I necessarily accept the opinions which Mr Scott has arrived at, especially opinions as to valuation evidence.
[7] Exhibits 2 and 3.
Specifically with regards to the question of access to the subject property, I do accept as a finding of fact that there are some difficulties using the current access to the property to transport cattle by way of B-double truck. I also accept that the current access has issues as a result of the emergence of a spring on Haynes Kite Millar Road. However, as this spring emerged subsequent to the valuation period currently under consideration it is not relevant to the current appeal.[8] I also accept that alternate legal access is available to the subject land via a more suitable, all weather boundary road but that there are currently no clear points to allow access to the property by the alternate route without substantial clearing, including clearing of vegetation on the road alignment.
[8] See Transcript 3-29 - 31.
Mr Scott gave extensive evidence in support of his view that the relativity of the unimproved value of the subject was incorrect when compared to four other properties, namely Goodger, Coolabunia, Nanango and Nukku. He helpfully produced the following table[9] to summarise his point:
[9] Exhibit 7.
“UNIMPROVED PROPERTY VALUATION RELATIVITY - VALUATION PERIODS 2005 AND 2009 BY COMPARISON
| PROPERTY | PROPERTY SIZE | PROPERTY CLASSIFICATION | VALUATION PER HECTARE 2005 | VALUATION PER HECTARE 2009 | PERCENTAGE INCREASE 2005 |
| BLACKBUTT | 94.72 HECTARES | CATTLE BREEDING & FATTENING | $1003 | $3009 | 200% |
| GOODGER | 124.9 HECTARES | PEANUTS (AGRICULTURAL) | $1169 | $2082 | 78% |
| COOLABUNIA | 63.96 HECTARES | PEANUTS (AGRICULTURAL) | $1777 | $3088 | 76% |
| NANANGO | 58.38 HECTARES | CATTLE BREEDING & FATTENING | $754 | $976 | 30% |
| NUKKU | 108 HECTARES | CATTLE BREEDING & FATTENING | $815 (Valued 2007) | $815 | VALUATION UNCHANGED |
NOTES:
1. ALL VALUES HAVE BEEN ROUNDED UP TO NEAREST WHOLE DOLLAR2. BLACKBUTT, GOODGER, COOLABUNIA AND NANANGO PROPERTIES ARE LOCATED IN SOUTH BURNETT REGIONAL COUNCIL AREA
3. NUKKU PROPERTY IS LOCATED IN TOOWOOMBA COUNCIL AREA, GEOGRAPHICALLY, IT IS LOCATED LESS THAN FIVE (5) KILOMETRES FROM THE SUBJECT PROPERTY AT BLACKBUTT
4. PROPERTIES DESCRIBED AS ‘BLACKBUTT’, ‘NANANGO’ AND ‘NUKKU’ ARE OWNED BY THE APPELLANTS”
Mr Scott’s amended report, which is Exhibit 3, contains a table where he further compares two properties to the subject property by way of cost per beast per hectare of unimproved value. The table is as follows:
“Property Stock Carrying Capacity Cost per beast per
hectare unimproved
valueBlackbutt 1 beast to 2.4 hectares $7221
Nukku 1 beast to 1.5 hectares $1223
Nanango 1 beast to 1.9 hectares $1854”During cross-examination, Mr Scott conceded that the valuation reports obtained from Mr Volp were not obtained for the purposes of the current Court proceedings but instead were obtained for family purposes and, coincidentally, the time frame of both overlapped.[10] During cross-examination, Mr Scott also stated that the valuation figure of $117,028 contended for by the appellants was arrived at by “comparing what had previously been, to our knowledge, market value of the land as compared to the unimproved value of the land prior to 2009. We used a similar multiplication factor to arrive at that figure.”[11]
[10] See Transcript 3-27 Lines 8-18.
[11] See Transcript 3-31 Lines 24-27.
Bradley Volp
Mr Volp is a highly experienced registered valuer who was called by the appellants to give evidence in this matter. I note that Mr Volp was employed by the respondent for 26 years and is very familiar with the process involved in valuing land under the VLA, having undertaken that process as a core part of his duties throughout those 26 years of employment with the respondent.[12] Mr Volp was responsible for three valuation reports which were tendered into evidence. It is highly significant that each valuation is an improved market valuation report as at 31 January 2012. Exhibit 13 is Mr Volp’s improved market valuation of the subject property known as Walena, while Exhibits 14 and 15 relate to the appellants’ properties known as Nukku and Nanango respectively.
[12] See Transcript 3-36 Lines 1-42.
During cross-examination by Ms Hawkings-Guy specifically relating to the 12 sales that Mr Volp relied upon in support of his market valuation, Mr Volp conceded that the Court could make “probably nothing at all” of those sales as they were provided to support his market valuation.[13]
[13] See Transcript 3-49 Lines 51-53.
Of particular note was Mr Volp’s evidence that there are different markets operating in the Kingaroy and Blackbutt areas. In Mr Volp’s words:[14]
“Yeah, they’re sort of different markets I guess from the point of view of - more the lifestyle market I think. … Blackbutt’s referred to as the poor man’s Maleny, I’ve heard that used a lot.”
[14] See Transcript 3-53 Lines 36-41.
Throughout his evidence, Mr Volp maintained his view of the ranking he would give the five properties set out in Exhibit 7 from a relativity perspective. Specifically in this regard, he gave the following evidence:[15]
“I suppose the subject property, to me, fits - you know, if you had the five in a row you’d have Coolabunia at the top, Goodger second and then the subject, and then the others are, say, four after that, looking them as market value scenarios. And as unimproved value, I think they’d have to be the same, same relationship. That’s the way I’d see them.”
[15] See Transcript 3-40 Lines 21-27.
Mr Volp went on to explain that in his view the subject property should be valued, in an unimproved sense, at something “slightly less than the Goodger property”.[16]
[16] See Transcript 3-40 Lines 41-42.
I was highly impressed by Mr Volp as a witness. He did not attempt to mislead the Court in any way by making Exhibits 13, 14 and 15 anything but what they in fact actually are: improved market valuation reports as at 31 January 2012 which are, in a valuation sense, of no use to the current appeal. However, his knowledge of the relevant properties is highly relevant to his view on relativity as between the various properties and I accept his evidence in this regard. It must of course be remembered that his evidence as to the ranking of the properties must be tempered by his acknowledgement during cross-examination that there is a different market in the Kingaroy district to the Blackbutt district.
Peter Mariner
The final witness to give evidence in this matter was Mr Peter Mariner, a registered valuer employed by the respondent. He has been a registered valuer since 1992 and has been valuing in the Blackbutt/Nanango/Kingaroy areas since 1993.[17] Mr Mariner provided an expert valuation report to the Court.[18] In that report, Mr Mariner relied upon four sales to arrive at his unimproved valuation of the land as at 1 October 2009. I have summarised the sales information from his valuation report as follows:
[17] See Transcript 3-56.
[18] Exhibit 9.
| Sale No. | Parties | Area | Date of Sale | Sale Price | Analysed Price | Applied Unimproved Capital Value |
| 1 | Jiglow P/L to Chisholm | 502 ha | 23-04-2008 | $850,000 ($1,693/ha) | $450,000 ($896/ha) | $380,000 |
Comparison
Superior to the subject with regards to size and views. Inferior with regard to country type, access, affect of vegetation management legislation and location to facilities. Comparable with regard to available services. Overall greatly inferior/ha.
| Sale No. | Parties | Area | Date of Sale | Sale Price | Analysed Price | Applied Unimproved Capital Value |
| 2 | McPherson to Corbett/Westcor Constructions P/L | 673.2 ha | 24-07-2006 | $1,300,000 ($1,931/ha) | $640,000 ($950/ha) | $510,000 ($757/ha) |
Comparison
Superior to the subject with regard to size, access, available services, affect of vegetation management legislation and views. Inferior with regard to country type and location to facilities. Overall greatly inferior/ha.
| Sale No. | Parties | Area | Date of Sale | Sale Price | Analysed Price | Applied Unimproved Capital Value |
| 3 | Munro to Bishop | 862.305 ha | 24-07-2007 | $1,550,000 ($1,798/ha) | $834,000 ($967/ha) | $690,000 ($800/ha) |
Comparison
Superior to the subject with regard to size and views. Inferior with regard to country type, access, affect of vegetation management legislation and location to facilities. Comparable with regard to available services. Overall greatly inferior/ha.
| Sale No. | Parties | Area | Date of Sale | Sale Price | Analysed Price | Applied Unimproved Capital Value |
| 4 | Gault to Ballin | 124.896 ha | 31-03-2009 | $175,000 ($1,401/ha) | $144,000 ($1,153/ha) | $115,000 ($921/ha) |
Comparison
Superior to the subject with regard to size and access. Inferior with regard to location to facilities, affect of vegetation management legislation and country type. Comparable with regard to available services. Overall greatly inferior/ha.
Mr Mariner conceded during examination-in-chief that his four sales were not ideal comparison sales. This is clearly evident when one looks at the comparison statement for each sale as compared to the subject. In particular, Mr Mariner had this to say:[19]
“As has been bought up in the Court today, they are considerably larger sales than the subject. In an ideal situation we would have sales - an array of sales that would show all country types, all sizes, all locations, but unfortunately we don't often get that. We have to rely upon the sales we've got.”
[19] See Transcript 3-61 Lines 46-51.
Mr Mariner was also firm in his evidence that there had been considerable market movement in the Blackbutt area during the 1 October 2009 valuation period. In his view, the primary production sector in the Blackbutt area “increased 200%”[20]
[20] See Transcript 3-61 Lines 19-20.
Mr Mariner also acknowledged that there were relativity difficulties in the wider district. In this regard, he had this to say:[21]
“I believe the relativity in that area has remained the same, which history has proven out. There is an issue between the subject sale and those through the boundary of the - the subject area and those through the boundary into the Toowoomba Regional Council. There is a relativity issue there. It - has been addressed - has been identified and is to be addressed in this 2012 re-evaluation. However, I'm here to defend the value of the subject. I cannot defend the whole district's value. I'm not aware of the - the - the sales over in Toowoomba. I - it - it appears they had the same problem with their smaller sights as we had, but we've addressed it on our side. It's too - a matter to be addressed in the 2012 re-evaluation.”
[21] See Transcript 3-63 Lines 41-53.
As regards the evidence of Mr Volp, Mr Mariner considered his evidence “quite good, quite fair handed … I thought he was very good”.[22] Mr Mariner was asked to take into account everything that he had heard as said by Mr Volp and Mr Scott during their evidence in the case and whether what they said caused him to change his valuation. He replied as follows:[23]
“I've given this valuation a great deal of consideration. Mr Volp and Mr Scott have pointed out those two properties; the Coolabunia and the Goodger property; is that right?
Yes?-- They're great blocks. More productive blocks. If the values from those properties to the subject property, I believe, just on the outlets set - on the prima facie, are out of line. I can - what I can say is the - the value placed on the subject property is in relativity with the - and the levels arrived at from sales in that locality, like I said, not ideal, but the only sales we have, the sales-----
And you're referring to the Blackbutt - the - specifically to the Blackbutt locality?-- Yeah. The sales - the - the values on those better properties over there at Goodger and Coolabunia would reflect the values arrived at from those sales. This could be a lot of - the - this could be a lot of different reasons for that. It could be the locality factor, as Mr Volp pointed out. What it - I thought it was quite clever, Blackbutt being the Maleny or - or something up there. There - it's a strange area because even with the home sites, the home sites seem to show a different movement, if you like, then a lot of the rest of the shire, and it's yet to be determined why, as far as I'm concerned, but it could be just a sheerly locational factor. The smaller primary production properties, such as the appellants, often have that rural home site factor to them, or lifestyle factor to them. That the larger properties and more productive properties don’t. In fact, one of the greatest difficulties we have in determining our markets for primary for production is smaller primary production properties very often make the same value as the larger rural home site properties, and they are very hard to split. So, therein lies the problem. I've mentioned the difficulty with those smaller properties, because we use the - the increments in valuation of the larger enterprises to reflect the fair dinkum primary production market. Often times, they get left behind, but - but market research shows they're a far greater value per hectare then the larger properties, so-----
So, what would happen then if you didn't make those adjustments?‑‑ Then we'd get further - the values would get further and further out of sync with the sales, and you'd have no basis at all. We got to continually look at - well, determining the markets. Not only the grazing market, not only the agricultural market, that sort of thing, but what locality factors have involved. Is there - is there a section there where the relativity is incorrect, that have fallen behind or got too high, and you correct it. Generally, you've got to wait until you've got the sales evidence to prove it, and in this - in the market at the time there was very little evidence, and, subsequently, there's been very little evidence. But as we get the sales to test our values, if you like, we apply those - apply those sales and adjust our values. That's why when that sale become available in the Blackbutt area, I had to use it because I couldn't just discount it. I couldn't discredit the sale.”
[22] See Transcript 3-64 Lines 9-14.
[23] See Transcript 3-64 - 65.
During cross-examination, Mr Scott asked some probing questions of Mr Mariner which went to the heart of Mr Scott’s complaints regarding the valuation process adopted by Mr Mariner. One relevant exert of the transcript in this regard is as follows:[24]
“If I accept what you say, that that gives you a floor, how do you then take that sale price and that established unimproved land value and arrive at $3,009 per hectare for the subject property? How do you do that?-- I keep the relativity in place in the locality, and I increase the value in line with the market evidence.
So, how do you keep that relativity in place? Is it a factor of something? Is it a percentage of something? Is it a judgment? What is it that allows you to keep that relativity in place?-- The way I do that is the fact that I haven't moved similar county, if you like, differently in that locality. I've moved it all in the same manner.
But you have moved country in that locality differently. You've moved country from Nanango in the same local authority area, South Burnett or the old Nanango Shire. The Nanango property owned by the appellants moved 30 per cent. The Blackbutt property, the subject property by the appellants in that same time moved by 200 per cent. Where's the relativity?-- Because the market evidence shows that a different locational factor, that submarket area in Scott, as we call lit, is different to what the south - Nanango - like, Marble Top or Barkers Creek, whatever it is.
So, which of these properties, sales 1 to 4, fall in the Scott area in the-----?-- That - the one at Bowman's Road.
…
You've only got this one sale number 2 as being in the subject area of the Scott market subdivision, sub area I think you called it. The other three properties don't relate by your own admission?-- The other properties relate in the fact that they're in East Nanango. What happened is that increase went across until we had market evidence that showed that that increase didn't get to that point. Okay. The East Nanango increases didn't go right out into the west because we had other evidence out there that better suited those localities and properties. We have used the most relevant market sales to use - to move the values of those East Nanango properties. As I also said, the southern - the southern - the Blackbutt stuff changed differently from the northern stuff because - because we had the sales evidence to prove that there was a difference in the market movement.
So, where in this report of yours in your four sales, or by how in your report of your four sales do you determine that the one sale, sale number 2 at Taromeo, allowed you to increase a market value - an unimproved land value by 200 per cent? Where is the other evidence of the sales in that area? The other three sales that you have; sales 1, 3 and 4 are in the East Nanango area and they are closer to the Nanango property owned by the appellants which only suffered a 30 per cent increase in the unimproved land value, yet you have one property here in your report which says - was sold for $931 a hectare on an unimproved value of $950 a hectare, but the subject property you've been able to move on that evidence to $3,009 a hectare. I need to understand how you did that?-- I thought I had explained it in the fact, and I'll repeat it, the evidence - the best evidence we had was the Bowman Road property. The relativity in the locality was maintained and it was indexed as per market evidence which was the Bowman Road.”
[24] See Transcript 3-79 - 80.
Following this evidence and further questioning, Mr Scott made the point to Mr Mariner that, in his view, Mr Mariner had no sales to verify his conclusions. Mr Mariner’s reply was telling for the determination of this case. He said “I have used the best sales, and there are no sales against me”.[25]
[25] See Transcript 3-82 Lines 16-17.
I was impressed by Mr Mariner as a witness. He did not attempt to make his sales anything more than what they are. He readily conceded that the sales were not the best comparisons to the subject property, and that there were difficulties when it came to questions of relativity over the wider area of the broad district, but that those issues of relativity were being continually addressed and that much had improved in the 2012 valuation.
His evidence remained firm and unshaken that the valuation of the subject property as at 1 October 2009 was correct, even if there were difficulties with relativity with other properties. The inference to be drawn from his evidence was that the value of some other properties may indeed be incorrect, which would mean in effect that the value of those properties, in particular Coolabunia and Goodger, may in fact be too low.
The concept of relativity
A significant case which had issues of relativity as a major consideration was that of Olm v Department of Natural Resources and Water.[26] That case had some similarities to the issues of relativity currently under consideration in the present case. In that case, with respect to relativity, I had this to say:
[26] [2008] QLC 4.
“[69]One of the central aspects of this appeal relates to a relativity argument as between the subject land and surrounding or nearby blocks of a similar size. The question of relativity was addressed by Member Scott in the Land Court case of Thomson v Department of Natural Resources and Mines where he said, at paragraphs [7] and [8]:
‘This issue has come up on more than one occasion in the past, one example being found in Gibson v Chief Executive, Department of Lands (V92-64 unreported Land Appeal Court 9 June 1995) at 6:
‘We reiterate what has been said often before – and what is Mr Tighe’s chief concern – the importance of correct relativity in the equitable distribution of the rating burden cannot be overstated. However the question before this Court is the correct valuation of the subject land, not the correct valuation of an area. It would not advance the appellant’s case to satisfy us that her neighbour’s land was undervalued: … The appellant must show that the valuation of her land was incorrect.’
A similar opinion is expressed by the Land Appeal Court in Bignell v Chief Executive, Department of Lands (AV92-65 unreported Land Appeal Court 4 March 1996) at 11:
‘What has to be decided in this case is the proper value of the subject land by reference to sales evidence about comparable unimproved properties. … If a proper valuation of the subject land makes it inconsistent with the relative values of neighbouring blocks then so be it. The question before this Court is ‘the correct valuation of the subject land, not the correct valuation of the area”.’
[70]I respectively agree entirely with Member Scott and with the passages he has quoted from Gibson and Bignell. As I pointed out in the case of Patterson v Department of Natural Resources and Water:
‘ … The appellants claim that each of these blocks is far superior to the subject block. Unfortunately for the appellants, the fact that blocks on Curve Avenue and Cameron Parade are valued at amounts in some cases lower than the subject in circumstances where the appellants claim those blocks to be superior does not necessarily assist their case. If the blocks on Curve Avenue and Cameron Parade are undervalued, using those blocks as a reason, on relativity grounds, to reduce the value of the subject block would only compound the error further and not result in an accurate valuation being determined by this Court for the subject land.
I am reminded of the comments made by Member Scott in the Land Court case of Dutton v Department of Natural Resources and Mines where at paragraph [12] of his decision he said:
‘It is difficult for a lay person such as Mr Dutton to produce evidence and argue a case such that it will upset a case presented by the Chief Executive with the aid of an expert witness such as Mr Moroney. Indeed that has been recognised by the Land Appeal Court in JL and I Qualischefski & Ors v Valuer-General (1979) 6 QLCR 167, where the Land Appeal Court said at 172:
‘The reasonableness of the allowances that have been made is always open to challenge on objection or appeal. However upon appeal a statutory onus of proof is cast upon the appellant and he has to accept, within the confines of the grounds set out in his Notice of Appeal to the Land Court, the burden of proving the Valuer-General incorrect. Neither this Court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-General to substantiate his case. This is in contradiction to jurisdiction conferred under the Land Act.
In appeals of the nature of the subject, the onus which the appellant must assume is not an easy one to discharge without the assistance of a registered valuer who can lead evidence as to sales analyses and/or comparison with valuations made by the Valuer-General in respect of comparable properties.’ ’
…
[75]To paraphrase Mr O’Connor’s evidence, in my view it is beyond doubt that errors have been made in the valuation process in the districts surrounding where the land the subject of these appeals is located such that relativities as between various properties are in some circumstances out of kilter and incorrect. However, as I have previously indicated when discussing the sales evidence in each of these appeals, Mr O’Connor has also confirmed that he has undertaken a careful analysis of the actual unimproved values of each of the appeal properties and he affirms the valuations which he has arrived at with respect to each of the properties, save for the valuation for which he leads evidence to a higher value.
[76]The question then arises, what impact should the incorrect relativities of surrounding properties have on the assessment of the unimproved values of the appeal properties in this matter? …
…
[81]In my view, whilst relativity is not the most important of features to be considered in appeals under the VLA, the issue of proper relativity as between properties in any given area must still have some real meaning. …
…
[82]… An appellant cannot simply look at the value ascribed to another property which is in all respects similar to his or her property but has a lower value and argue that the value of his or her property should therefore be reduced in line with the other property. This is because the valuation of the other property may indeed be too low.”
Footnotes omitted
Olm and the cases referred to in that decision are of course not the only decisions of the Land Court or Land Appeal Court relating to relativity. In Cupo & Anor v Department of Natural Resources and Water,[27] Member Jones, as he then was, had this to say:[28]
“[26]Mr Cupo points to a number of examples of where, in his opinion, there are material inconsistencies between the unimproved values assigned to other blocks in New Farm when compared to those assigned to the subject blocks. …
…
[29]With the exception of a parcel of land located at 1 Welsby Street, I am reasonably satisfied with Mr Taylor’s explanation for any apparent discrepancies and inconsistencies in the unimproved values applied to the blocks to which his attention was drawn when compared to the unimproved value applied to the subject blocks. In respect of the land located at 1 Welsby Street, Mr Taylor conceded that the present unimproved value was too low and ought be revised upwards.
[30]In any event it is now well accepted that, generally speaking, the best evidence for determining a basis for the assessment of unimproved value of land is the evidence of sales of comparable vacant or lightly improved land which occurred at or about the relevant date of valuation. With the exception of his sale 5, Mr Taylor’s sales evidence falls into that category. As I have already said, I am satisfied that Mr Taylor has had regard to, analysed and applied reliable sales evidence. When regard is had to all of the evidence there is no basis for concluding that the valuations appealed against ought be reduced any further than has already been allowed for when dealing with the issue of flooding.”
[27] [2009] QLC 16.
[28] At paragraphs 26, 29 and 30.
It is also appropriate that I refer to a passage from the decision in Burnett v Department of Natural Resources and Water[29] which I have repeated in numerous cases since. In Burnett,[30] I had this to say:
“This is a difficulty often faced by appellants in VLA matters who rely on relativity as one of their grounds of appeal. It is not enough for an appellant to simply demonstrate that the value of the appeal block is out of kilter with other, nearby blocks. They need to go further to demonstrate that the values of those other blocks are correct, and that the value of the appeal block is incorrect. This is because it is the primary function of the Court to determine the unimproved value of the land subject to appeal. Changing an issued valuation simply because other valuations may be wrong would only tend to exacerbate the error. Of course, this is a generalised statement, and each case must be determined on its own facts.”
[29] [2010] QLC 57.
[30] At [18].
Additional considerations
As has been often stated,[31] the Land Court is not an investigating tribunal. It must rely on the evidence put before it by the parties.
[31] See for instance Farr v Valuer-General [2012] QLC 64.
It is also pertinent to note the decision of the Land Appeal Court in JL and I Qualischefski & Ors v Valuer-General[32] where that Court said:[33]
“…
Neither this court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-General to substantiate his case. This is in contradistinction to jurisdiction conferred under the Land Act.In appeals of the nature of the subject, the onus which the appellant must assume is not an easy one to discharge without the assistance of a registered valuer who can lead evidence as to sales analyses and/or comparison with valuations made by the Valuer-General in respect of comparable properties.”
[32] (1979) 6 QLCR 167.
[33] At 172.
Further, in the case of N.R. and P.G. Tow v Valuer-General[34] the Land Appeal Court made the following observations:[35]
“…
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.”
[34] (1978) 5 QLCR 378.
[35] At page 381.
Determination
There is no doubt that I face a dilemma in this matter. I have received good evidence from a registered valuer, Mr Volp, which I accept, as to the ranking of various properties from a relativity perspective. I have also, however, received evidence from Mr Volp that there is a different market in Kingaroy to that of Blackbutt. Unfortunately, Mr Volp was not briefed to supply the Court with any valuation evidence relating to the 1 October 2009 valuation period and sales of unimproved or lightly improved properties relevant to that period.
For his part, Mr Mariner has conceded that there are difficulties with relativity in the broader district. However, he steadfastly maintains that the valuation of the subject property is correct. He relies upon sales evidence of properties relevant to the 1 October 2009 valuation period to arrive at his conclusions. Although the sales he refers to are by no means good comparisons to the subject property, they are, as he has pointed out, the best that he has, and there have been no sales evidence from the relevant period placed before the Court to show that his sales are incorrect.
I am concerned that there are relativity discrepancies within the broader district surrounding the subject land in this case. I am also concerned that those relativity inconsistencies relate to a number of properties owned by the appellants. However, particularly in cases relating to the valuation of unimproved value of land under the VLA, the appellant has a heavy burden indeed to displace the presumption of correctness. Without the benefit of relevant sales evidence from the valuation period under consideration, even with the concerns which have been borne out in the evidence, the appellants fall far short of displacing the presumption of correctness of the valuation.
The ultimate findings in this case remind me of the determination made by Member Isdale in the case of Goodwin v Valuer-General[36] where his Honour stated as follows:[37]
[36] [2011] QLC 27.
[37] At paragraphs 32-37.
[32]The Land Appeal Court, in Grahn’s case reiterated that considerations of relativity, while important, should not be preferred to sales evidence.
[33]Although there is no response from the respondent to the matters raised by this Court in 2009 concerning relativity, the Court’s jurisdiction limits it to deciding the present appeal on the evidence provided in it. The respondent has focused his case on sales and the Court is bound to decide on the basis of the sales whether the appeal succeeds or not. This will doubtless be unsatisfying to the appellants but is a matter that the Court must accept.
[34]What is now s.33 of the Valuation of Land Act 1944 was previously s.13(7). The presumption of correctness of valuations made under the Act was considered in Brisbane City Council v The Valuer-General for the State of Queensland. Justice Gibbs, as he then was, in the High Court of Australia, said, at p.56:
‘In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s.13(7) is rebutted.’
…
[35]In this case there was only one expert witness, qualified and practising in the field of valuation. His evidence was, contrary to the suggestions of the appellants, that he was indeed able to make valid comparisons between the subject and sale properties. The sale transactions themselves were not shown to be of a nature as not to represent market transactions and there was no body of alternative sales put before the Court from which different conclusions as to value could be drawn. Additionally, it was not shown that the expert’s opinion was invalidated by being based on an error of law or significant factual error.
[36]The respondent chose to base the case presented on sales, which the authorities, binding on this Court, state are a better guide to value than relativity with other values. The drift in relativity referred to in 2009 was not sufficient then for the Court to allow the appeal but correcting any inconsistencies in relativities was recommended by the Court. It is now recommended once again.
[37]On the basis of the evidence to which I have referred, it was not shown that the presumption of correctness of the valuation had been displaced so accordingly the Court must dismiss the present appeal and affirm the valuation appealed against.”
Footnotes omitted
Just as Member Isdale found in Goodwin, on the facts of this case as presented to the Court and in light of the expert evidence, I have no option but to order that the appeal be dismissed.
Order
1. The appeal is dismissed.
P A SMITH
MEMBER OF THE LAND COURT
0
7
3