Scougall v Department of Natural Resources and Mines
[2003] QLC 35
•22 May 2003
LAND COURT OF QUEENSLAND
CITATION: Scougall & Anor v Department of Natural Resources and Mines [2003] QLC 0035
PARTIES: Raymond S and Veronica B Scougall
(applicants)
vChief Executive, Department of Natural Resources and Mines
(respondent)
FILE NO: AV2002/0548
DIVISION: Land Court of Queensland
PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944
DELIVERED ON: 22 May 2003
DELIVERED AT: Brisbane
HEARD AT: Brisbane
MEMBER: Dr NG Divett
ORDER: The appeal is dismissed, and the unimproved value of Lot 1 on RP 34574 as determined by the Chief Executive in the sum of One Hundred and Fifty Thousand Dollars ($150,000) is affirmed.
CATCHWORDS: Annual valuation – Factors in valuation – Relativity – Lack of evidence to support change – Previous relativity as a guide – Reliance upon sales evidence preferred – Valuation of Land Act 1944
APPEARANCES: Mr RJ Scougall for the appellants
Ms R Trigge for the respondent
Background:
This matter relates to land at 71 Ridge Street, Northgate and described as Lot 1 on RP 34574, Parish of Toombul. The subject land has an area of 809 m² and is located about 9.5 kilometres radially north-east of the Brisbane GPO. The land is designated as Low Density Residential area LR under the Brisbane City Plan 2000, effective at the date of valuation of 1 October 2001. Access to the subject land is good to Ridge Street which is bitumen sealed with concrete kerbing and channelling. All normal utility services are available. The key issues are the nature of the land, changes in relativity, and comparison of sales.
On 25 February 2002 the Chief Executive issued a valuation of the subject land at $150,000. Following an objection the Chief Executive confirmed that figure on 9 July 2002. The appellants have now appealed claiming the unimproved value should more properly be $138,000.
Mr Raymond John Scougall an experienced registered valuer, and son of the appellants, appeared for the appellants. Ms R Trigge, senior legal officer appeared for the respondent, calling evidence from Andrew Trevor Brown, the departmental registered valuer responsible for determining the valuation.
History of the Valuation -
This matter is part of a long period of differences between the parties in respect of this property. The matter came before this Court most recently in respect of an appeal against a valuation at 1 October 1996 (AV97-395), and again in 1 October 1997 (AV98-660). In the matter of AV97-395, the learned Member upheld the appeal determining the unimproved value at $94,000, instead of the $108,000 appealed against. In the matter of AV98-660 the Member affirmed the Chief Executive’s determination at $99,000. A general outline of the history of appeals on this property was explained in the decision of AV98-660.
Mr Scougall has a sound knowledge of the subject land, having lived upon the site about 20 years ago, and also retaining regular and consistent visits to his parents since that time. Mr Brown also has a good personal knowledge of the locality, as he now resides in the adjoining suburb of Wavell Heights, and is familiar with the general traffic movements through the locality. Mr Scougall also resides a similar distance away at Boondall. Mr Scougall appears both as an agent for the parents, and also as a registered professional valuer, who has made extensive inquiries of the relevant public authorities in respect of railways and bus transport services.
Ms Trigge draws the attention of the Court to the lack of appearance by the appellants, thus removing any opportunity to cross-examine them in respect of the nature of the subject land. She notes that the findings of Jones v Dunkel & Anor (1959) 101 CLR 298, at 312 and 319, infers that the unexplained failure to provide evidence may, but not necessarily must, in the circumstances of this matter, indicate that the uncalled evidence would not have assisted the appellant’s case. That principle was addressed by the High Court in The Insurance Commissioner v Joyce [1948] 77 CLR 39, where Rich J said at page 49 that a balance of probability is enough.
However the Jones v Dunkel principle also provides that any inference that failure to call further evidence may not support the appellants’ case, only applies where proof of a statement may be required.
In Jones v Dunkel Menzies J said at p.312:
“(iii) that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.”
In the current matter Mr Scougall relies only upon his own professional and personal experience, and I see no reason to conclude that the appellants would not support his advice to the Court. That is the regular experience of agents representing a party in this Court. While Mr Scougall is related to the appellants, his professional responsibility to the court dictates that his judgment should rely upon the facts supplied. I get no assistance from Jones and Dunkel in this matter.
The Nature of the Land –
There was considerable discussion about the location of the subject land in respect of the evidence of the comparable sales. Mr Scougall effectively argues that the features of the subject land have been overstated by Mr Brown in those comparisons. Mr Brown argues that the subject land is in close proximity to the Nundah Village shopping precinct, currently under construction, as well as Toombul and Chermside shopping centres. Mr Scougall notes that Nundah Village is 2 kilometres from the subject land, and Toombul and Chermside are 3 kilometres and 4 kilometres respectively. Mr Brown advises that he has seen that proximity as being within easy driving distance, or within easy access by bus or train transport.
The location of the subject land in relation to local shopping and neighbourhood parks was also a matter of professional judgment. However it was agreed that there is a small local group of shops at the corner of Northgate Road and Ridge Street, about 200 metres south-east of the subject land; and a small local park in Flower Street about 800 metres south of the subject land. The Nundah Railway Station is about 600 metres south-east of the subject land; and the Virginia Railway Station is about 600 metres to the north-west. Because of the generally level nature of the surrounding topography, photographs confirm that there is easy walking along Ridge Street in either direction to facilities and schools. (Exhibit 5).
There was also some difference about the relative impact of traffic along Ridge Street. Historically Ridge Street was seen to be a connecting road between Sandgate Road and the Northgate Railway Station; as well as connecting traffic along Northgate Road to Banyo and Nundah Shopping Centres. However Mr Brown advises that Gympie Street now carries the major traffic flows in that area. Gympie Street joins Sandgate Road at traffic lights, and has traffic roundabouts at its intersection with Northgate Road and St Vincent’s Road. Gympie Street has recently become the major access to a new public car park for commuter traffic at the Northgate Railway Street, and with traffic calming facilities along its length. Mr Scougall advises that access to another car park is also available from Ridge Street between Ryans Road and Hall Street, where a car park is also located on the south-western side of Ridge Street. Mr Scougall also notes that Ridge Street is a bus route through the area, supporting his contention that it carries significantly greater traffic than normal residential streets such as Peary Street to the south-west of Ridge Street.
It is also agreed that noise barriers have been installed along the boundary of the railway corridor adjoining Belmore Street to the north-east, thus restricting noise. Mr Brown advises that with changing perceptions in society, people now even prefer living adjoining railway lines, rather than locating further removed from the Central Business District. He also advises that with the retention of “character housing” provisions in the town plan, people are seeking to refurbish old dwellings, or even construct new dwellings in the same character style, thus enhancing the environmental character of the area. He argues that change in societal expectations adds to the value of the locality of the subject land.
Mr Scougall draws attention to the existence of unpleasant pungent odours emanating from the Northgate Cannery, which is located about 800 metres north-east of the subject land. He concedes that those odours are only experienced when the prevailing breezes come from that direction, but argues that they are a disability to the subject land. Mr Scougall agrees however that the visual aspect from the subject land towards the north-east is not dominated by the cannery building in the distance, but reflects a normal suburban outlook with trees. (Exhibit 5).
In respect of the general nature of the topography of the subject land, it is agreed that it is above street level, falling about 3 to 4 metres over its depth of 40 metres. The elevation of the subject land is described generally as at a moderate elevation of height between 20 metres and 25 metres Australian Height Datum (AHD). There is a besser block retaining wall about 2 metres high along the rear boundary of the subject land, where the adjoining property fronting 82 Peary Street (Lot 74) has constructed a swimming pool upon an old tennis court. Surface waters from that property and the adjoining parcels in Peary Street at 80 Peary Street (Lot 3 on RP 123906) and 88 Peary Street (Lot 73) all drain along the side boundaries of the subject land by storm water pipes into Ridge Street.
It is agreed that Peary Street is along the top of the ridge line in that area, and is seen as the premier location in the locality. The storm water pipes were installed by the adjoining owners, who have responsibility for their maintenance. Mr Scougall agrees that the storm water pipes do not impact greatly upon the use of the subject land, however he believes that their presence is really just an impost not generally found upon comparable properties. There is also a small garage at the rear of the subject land which is used to house a caravan, and which provides some barrier to noise associated with the use of the swimming pool on the neighbouring property.
Relativity –
A key part of Mr Scougall’s concerns is that the respondent has failed to recognize the previous relativities established by the Court, or agreed between the parties over a number of years. While Mr Scougall agrees that relativities can change over time, he argues that there has been no evidence of sales in the particular fully established neighbourhood of the subject land that would justify a change in the former relativities. Without sales evidence to support change, he argues that the former relativities should be maintained. Mr Scougall relies upon the decision of the Land Appeal Court in McGuigan & Ors v Valuer-General (1984-85) 10 QLCR 32, at 39.
To support the above conclusion, Mr Scougall draws relativity with parcels at 85 Peary Street, 27 Little Street and 25 Henchman Street, all of which were adopted as sales evidence by the respondent in his determination of the 1 October 1999 valuation of the subject land at $115,000. Mr Scougall notes that while the unimproved values of those three former sales had been increased by between 15% and 20% to the current period, the subject land had been increased by 30% at the same date. (Exhibit 7, Appendix D). He argues that changed increase has upset the agreed relativities for the subject land.
Mr Scougall also draws comparisons with land at 3 Pole Street, which was determined by the Court to be comparable with the subject land at $94,000 (1 October 1996); and later agreed by the Chief Executive at $115,000 (1 October 1999) and 1 October 2000). He argues that there is no evidence to show why those former agreed relativities should be altered at the current relevant date. Based upon that relativity with 3 Pole Street, Mr Scougall argues that the subject land should have an unimproved value of $138,000.
The matter of relativity was also noted by Ms Trigge who provides schedules of unimproved values of the following parcels:
Parcel Unimproved Values 1.1.96 1.10.96 1.10.97 1.10.98 1.10.99 1.10.00 1.10.01 (1) 85 Peary Street $124,000 $143,000 $132,000 $145,000 $215,000 $215,000 $250,000 (2) 68 Peary Street $107,000 $123,000 $113,000 $124,000 $180,000 $180,000 $215,000 (3) subject land $94,000 $94,000 $99,000 $109,000 $115,000 $115,000 $150,000 Relativity to 1 0.76 0.66 0.75 0.75 0.53 0.53 0.60 Relativity to 2 0.88 0.76 0.88 0.88 0.64 0.64 0.70
Mr Brown advises that the adjoining parcels to the subject land at 85 Peary Street and 68 Peary Street had been increased dramatically in 1999 to reflect the sale at 85 Peary Street. However he argues that the increases at that time had only been extended laterally in Peary Street, and had not been flowed on to adjoining parcels in Ridge Street. Mr Brown argues that, in his opinion, there had been an incomplete assessment of the rippling effect of the increasing values in that area, which should have also reflected some increase in the adjoining subject land in Ridge Street.
Because of that inconsistency, Mr Brown now seeks to rectify the relativities of 1 October 1999 and so increase the value of the subject land to reflect the market increase at 85 Peary Street. He notes the 45% to 48% increase in Peary Street in 1999 compared to only a 5% increase in Ridge Street at the same date. Mr Brown advises that he has only been responsible for valuing the area of the subject land since 2001, and as part of his review of relativities in the area, he has sought to remedy what he sees as an oversight in the previous relativities. He thus sought to gradually bring the unimproved values in Ridge Street into line with Peary Street. Mr Brown notes that any change in relativity between Peary Street and Ridge Street would also affect the former relativity with 3 Pole Street. He notes that the “character housing” in Ridge Street is more popular than houses in Pole Street.
In respect of any changes in the local neighbourhood, Mr Brown draws some support from the changes in traffic density along Gympie Street. He argues that as a result of that more direct feeder route to the railway station, compared to the previous traffic along Ridge Street, it is his opinion that there is less traffic in Ridge Street. However he has no traffic counts to support that conclusion, relying only upon the traffic calming arrangements in Gympie Street. However Mr Scougall advises that the roundabouts in Gympie Street had been in existence for several years, and were likely to be evident at the time of the previous relativities.
Mr Brown confirms that there have been no sales of vacant lands in the local area to demonstrate any change in relativity. Mr Brown also confirms that the previous valuer who established the original relativity (Mr Houghton) had been an experienced valuer of many years standing. Mr Scougall also notes that the previous relativity had been established after extensive consultation with Mr Houghton over successive objection conferences. Mr Brown argues that market forces in the area had changed from 1998 as evidenced by analysis of improved sales over time.
Comparison of Sales –
To support his estimate of the unimproved value Mr Scougall relies upon a common sale with the respondent at 29 Imbros Street Nundah. That sale sold in February 2001 for $177,000, and after allowing for the removal of a dwelling ($5,000) and clearing and fencing ($2,000) was analysed at $170,000, and has been applied at $170,000 (100%). Mr Scougall sees that sale as overall vastly superior to the subject land.
Mr Brown provides the following sales of lightly improved parcels:
·Sale 1 – (236 Shaw Road, Wavell Heights – Lot 15 on RP 25032). This is a 405 m² Low Density residential parcel located 1.6 kilometres west of the subject land. The sale is much smaller than the subject land, and has access on to busy Shaw Road which has parking restrictions and entry delays during peak hour traffic. The sale is seen as inferior in position and location, and far inferior in respect of size. The sale sold in August 2001 for $95,000, was analysed at $91,000 and applied at $88,000.
[27]
·Sale 2 – (29 Imbros Street, Wavell Heights – Lot 29 on RP 58718). This is the common sale of area 609 m² and located about 1.6 kilometres south-west of the subject land, near Sale 1. The sale is seen as smaller in size, but otherwise similar to the subject land overall. The sale sold in February 2001 for $177,000, was analysed at $171,000, allowing for removal of the old dwelling, and applied for $170,000 (99%).
·Sale 3 – (43 Surrey Street, Northgate – Lot 11 on SP 142204). This is a 400 m² Low Density residential parcel located about 700 metres south-west of the subject land. The sale is seen as far inferior than the subject land in size, nature and location, and is located in an inferior locality with multi-residential developments behind and across the road. The sale sold in September 2001 for $135,000, was analysed at $125,000 and applied at $102,000 (82%).
[29]
·Sale 4 – (40 Sugarloaf Street, Wavell Heights – Lot 34 on SP 141791). This is a 400 m² Low Density residential parcel located 600 metres south-west of the subject land. The sale is seen as inferior due to size and location, and is further removed from rail transport. The sale sold in May 2001 for $122,500, was analysed at $119,000 and applied at $96,000 (81%).
In addition to these three sales in Wavell Heights, and one sale in Northgate, Mr Brown provides two supporting sales of vacant land in view of Sale 3 being the only vacant sale in the immediate locality of the subject land. These two supporting sales occurred after the date of valuation (1 October 2001), but before the date of issue of the valuation (25 February 2002).
·Support Sale 1 – (Ridge Street, Northgate – Lot 86 on RP 34577). This is a 405 m² vacant parcel located diagonally across Ridge Street from the subject land. The sale is seen as inferior to the subject land due to smaller size, inferior position, and nature below Ridge Street. The sale had an unimproved value of $74,000 (1 October 2000) and was applied at $96,000 (1 October 2001). The sale sold in December 2001 for $147,000.
·Support Sale 2 – (Almond Street, Northgate – Lot 48 on RP 34526). This is a 405 m² vacant sale which is seen as inferior to the subject land due to its smaller size, and lesser location to facilities. There is also multi-unit development in the area. The sale had an unimproved value of $81,000 (1 October 2000) and was applied at $105,000 (1 October 2001). The sale sold in February 2002 for $180,000.
Mr Scougall rejects Mr Brown’s only local sale at 43 Surrey Street, which he argues reflects a high peak in the market at the contract date of 1 September 2001, without any supporting local sales to support its “once off” nature. He notes that Mr Brown’s very conservative application of that sale at $102,000 (82%) supports that conclusion. He further argues that sales of such smaller size lots in a limited market reflect a higher rate of increase than the larger parcels. Mr Brown agrees that small lots are selling quicker, but argues that because of the potential to subdivide the larger lots, they now are more valuable than previously. Mr Scougall also claims that the rapid increase in the market level occurred at about 1 October 2001.
In respect of applying comparisons with sales in the adjoining suburb of Wavell Height, Mr Scougall agrees that such comparisons can be made. However he cautions any reliance upon the two supporting sales supplied by Mr Brown. Mr Scougall believes that those two supporting sales do not support the current high value of the subject land, but are indicative of the next valuation period. He notes that the low application of the Ridge Street sale (65%) and the Almond Street sale (58%) support that conclusion. Because of the obvious increase in the market level at the dates of the subsequent sales, he argues that the principles espoused in McCathie v Federal Commissioner of Taxation (1944-45) 69 CLR 1, dictates their uselessness in the current matter. He also notes that in applying such low levels of the actual sale price of those two supporting sales, Mr Brown is virtually ignoring precedent established by the courts in respect of comparable sales. Mr Brown argues that it is within his expertise to make appropriate conservative adjustments for rises in the level of the market.
While he agrees that Mr Brown’s Sale 3 (43 Surrey Street) is inferior to the subject land, Mr Scougall disagrees with Mr Brown’s comparison in respect of the frontage of Sale 3 as being smaller than the subject land. Mr Scougall notes that both properties virtually have identical frontages of about 20 metres. (Exhibit 9). Mr Brown only sees 43 Surrey Street as a supporting sale in his determination of the value of the subject land.
A key difference between the valuers lies in their understanding of the common sale at 29 Imbros Street. Mr Brown sees that property as similar to the subject land, while Mr Scougall sees the sale as superior to the subject land. Mr Scougall notes the elevation of 29 Imbros Street is about 32 metres AHD, while the subject land is about 22 metres AHD. (Exhibit 3). He notes further that 29 Imbros Street has good mountain views to the west along Lemnos Street, which falls away from Imbros Street. Mr Brown concedes that the mountain views at 29 Imbros Street are superior to the views at the subject land. Mr Scougall also argues that there is the potential for views of the City centre towards the south from a highest dwelling, however he concedes that the purchaser has not sought the benefit from any potential views by selecting a low set dwelling. Mr Brown rejects that City centre views are available from 29 Imbros Street.
Mr Scougall also notes that proximity to the major shopping facilities and the City centre are all slightly in favour of 29 Imbros Street compared to the subject land. He notes the following comparisons:
Facility 29 Imbros Street Subject land City centre 8.0 kilometres 9.5 kilometres Nundah shops 1.2 kilometres 2 kilometres Toombul shops 2 kilometres 3 kilometres Chermside shops 3 kilometres 4 kilometres Local parks 800 metres 800 metres Local schools 650 metres 700 metres While proximity to the above facilities is not greatly different for the two parcels, Mr Scougall argues that, if anything, they favour 29 Imbros Street.
In disagreeing with Mr Scougall’s comparisons of 29 Imbros Street, Mr Brown advises that he currently resides only 400 metres from that property, and he has an intimate knowledge of that locality. He argues that traffic from commuters is more intense at 29 Imbros Street compared to the subject land. Mr Brown notes that “rat runners”, seeking to avoid traffic lights at the corner of Edinburgh Castle Road and Rode road, pass down Imbros Street.
Mr Brown agrees that both 29 Imbros Street and the subject land are above street level, although 29 Imbros Street is a slightly more level parcel. However he does not see that slightly lesser fall as significant in terms of the value of the land. Mr Brown argues that Northgate and Wavell Heights areas are slightly different, but are still very comparable. Mr Brown also notes no dramatic changes in the market level at the relevant date, noting that the market had been steadily increasing throughout 2001, and continues into the present time. Mr Brown argues that the market in that area would give some preference to the character style development in Northgate, compared to the later development styles in Imbros Street. On that basis, weighing all advantages and disadvantages, both valuers continue to disagree about the comparability of 29 Imbros Street.
In respect of why he has now supplied the additional Sale 4 (40 Sugarloaf Street), not previously referred to in the departmental response of 16 August 2002 to the judicial review request for sales information, Mr Brown advises that he is not limited to the selected sales noted in the letter of 16 August 2002.
Decision:
The Nature of the Land -
[41}While there is some minor difference of understanding between Mr Scougall and Mr Brown in respect of the general nature of the immediate locality of the subject land, I believe that it may reasonably be described as a medium elevated parcel in a pleasant suburban environment, and conveniently located to both local and regional facilities. There would appear to be little variation from the previous understanding of the property evident at the earlier matters before this Court in June 1999 (AV98-660) and September 1998 (AV97-395). There would appear to now be some greater reliance upon Gympie Street as a traffic way compared to Ridge Street. However there was no evidence that traffic levels in Ridge Street had declined over time, but only an inference that the traffic had increased in Gympie Street.
Relativity –
However a key difference between the parties lies in their reliance upon the previous relativities agreed in the area. Mr Scougall concedes that relativities can change over time, but argues that any change in relativity should only be demonstrated by market evidence that changing patterns have occurred. In the absence of sales in the immediate local area of the subject land, Mr Scougall claims that the relativities with adjoining parcels should not be impacted, even though the overall level of value of all of those adjoining parcels may rise or fall with the evidence of sales of vacant lands.
Clearly on the evidence supplied, Mr Brown feels that the former relativities with the earlier sales in Peary Street, was inappropriately applied to the subject land. In the course of the current valuation Mr Brown has sought to rectify that relationship, and has increased the unimproved value of the subject land accordingly. The schedule in paragraph [20] clarifies that situation.
In seeking to correct what he sees as an error in the relativity agreed in 1998, Mr Brown can rely upon guidance to be found in R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13, where the Land Appeal Court said at p.16:
“We are conscious that it is desirable that valuations made for the purposes of the Valuation of Land Act of comparable lands should bear proper relativity, one to the other, if the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis.”
The principle was further clarified in TF and SA Shepherdson v Valuer-General (1992-93) 14 QLCR 83, where the learned Member found at p.86:
“If possible, the Valuer-General should obtain uniformity between different blocks in the same land category or type, but should do so (preferably by reference to sales of comparable lands) by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error.”
The decision in Barnwell also relied upon the findings of Ladies Hosiery and Underwear Limited v West Middlesex Assessment Committee (1932) 2 KB 679 (see also 1932 All ER 427), where Scrutton LJ said at p.688:
“That the assessing authority should not sacrifice correctness to ensure uniformity, but, if possible, obtain uniformity by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error.”
However in support of Mr Scougall’s reliance upon the former agreed relativities, in the absence of evidence that would upset those relativities, I accept that relativity is a factor which should, in the overall purpose of the Valuation of Land Act, be maintained in order to preserve a consistent and fair approach to the purpose of taxation undertaken using valuations determined under the Act. I accept also that, in the absence of evidence to the contrary, then it would be appropriate for the respondent to not upset existing relativities, which were determined following a comprehensive valuation of a broader range of sales evidence.
The matter of maintaining relativity was also discussed in Gibson Investments Pty Ltd v The Valuer-General (1978) 5 QLCR 223, where the Land Appeal Court said at p.230:
“It has been stressed on many occasions that reasonable property to property relativity within shires, is highly desirable to ensure an equitable distribution of the incidence of rating. … However, this is feasible only if the relevant dates of valuation are close in point of time and there have been no intervening circumstances affecting the market place.”
It is also noted that relativity between parcels in an unimproved sense may change from time to time. For example, in JD Lindenmayer v Valuer-General (1974) 1 QLCR 273, the President noted at p.276:
“I am, of course, not bound by any past relativity whether it be established by the Land Court or otherwise. It is well recognised that relativity between blocks in an unimproved sense may change from assessment period to assessment period.”
That was also followed in R and MM Barnwell v Valuer-General (supra), where the Land Appeal Court said at p.17:
“It has been well recognised over the years that previously established relativity in unimproved values can and does change from valuation to valuation. If there was no justification for change in relativity, the valuer’s task would be very simple in that all it would be required to establish value would be accomplished by the use of an adjusting formula. This, of course, is undesirable.”
Mr Scougall also draws my attention to the findings of the Land Appeal Court in WJ and AM McGuigan & Ors v Valuer-General (1984-85) 10 QLCR 32, where it said at p.38:
“It is bona fide sales conforming to the test for the Spencer case that set the level of values for respective land categories and types. Relativity is established in the market place not by previously established relativities which, in their turn, would reflect a sale market of an earlier relevant date. As already discussed, relativity between individual parcels within the various land categories or types, is important. If it cannot be established by sales of properties similar or comparable in all relevant aspects a previous relativity may provide a guide.”
Mr Scougall argues that there has been no recent sales to demonstrate that the former relativity has been disturbed.
What I am then left with is the differing views about the former relativities by the two experienced valuers in this matter. Mr Scougall argues that the Court and Mr Houghton had not made an error in the relativity adopted in 1998, while Mr Brown argues that the relativity of parcels in Ridge Street, including the subject land, had not been appropriately adjusted to reflect market appreciation at the date of the former sale at 85 Peary Street in 1998, and used in the previous challenge to 1 October 1999 valuation. (Exhibit 7, Appendix C).
In considering such different opinions, I am reminded that valuation comparisons involve matters where professional judgment form an important aspect. That was observed in Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co (1901) AC 373, at p.391:
“It is quite true that in all valuations, judicial or other, there must be room for inferences and inclinations of opinion which being more or less conjectural, are difficult to reduce to exact reasoning or to explain to others. Everyone who has gone through the process is aware of this lack of demonstrative proof in his own mind, and knows that every expert witness called before him has had his own set of conjectures, of more or less weight according to his experience and personal sagacity.”
That guidance was also noted in the matter of Chief Executive, Department of Natural Resources v Radlett Enterprises Pty Ltd (1997-98) 18 QLCR 397, where the Land Appeal Court was confronted with the lack of directly comparable sales evidence. The Land Appeal Court also noted the advice in Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1980-81) 146 CLR 336, where Mason J said at p.381:
“Valuation is a matter of estimation, not a precise mathematical calculation.”
In considering that guidance I believe that this is a matter where the previous relativity can provide some guidance, but should not override any directly comparable sales evidence.
Comparison of Sales –
I turn then to the larger increase of 30% applied to the subject land, compared to the 15% to 20% increase applied to the previous parcels at 85 Peary Street, 27 Little Street and 25 Henchman Street. I note that a large increase in itself is not evidence of some error in the valuation, as long as “bona fide sales of comparable parcels support the new valuation”. (NR and PG Tow v Valuer-General (1978) 5 QLCR 328, at 381). I note also that it is agreed that sales of comparable vacant or lightly improved lands are seen as the best method of determining unimproved value, if they are available. (PH Clough v Valuer-General (1981-82) 8 QLCR 70, at 76).
In the comparisons of vacant sales Mr Scougall rejects the sales of smaller parcels of area 400 m², which he argues is a different market segment compared to parcels similar in size to the subject land at 809 m². While Mr Brown agrees that those smaller lots do sell quicker than the larger lots, he argues that the larger lots are also dearer than the smaller lots. However it is agreed that both size parcels provide a single house site under s.17 of the Act. On that basis they are seen in the market place as comparable residence sites.
In respect of the level of market increase during the relevant period, Mr Scougall argues that the market commenced to accelerate about 1 October 2001, while Mr Brown argues that it maintained a steady rate of increase throughout 2001. While there is no other supporting evidence to confirm either understanding of market change, it is a reasonable assumption to conclude that the market level did increase between the date of valuation at 1 October 2001, and the date of issue of the valuation at 25 February 2002. On that basis I note guidance in respect of sales subsequent to the date of valuation in McCathie v Federal Commissioner of Taxation (1944) 69 CLR 1, where Williams J said at p.16:
“Values must be calculated in the light of circumstances which existed on the material date. … But subsequent events can be taken into account in order to determine the proper weight to attach to such circumstances. Subsequent sales are just as admissible in evidence as prior sales, provided that in all the circumstances they are comparable. If between the material date and the date of subsequent sale supervening events occur which alter the conditions previously existing, the subsequent sales would not be comparable and would be useless.”
That guidance was also followed in a previous appeal by Mr Scougall in RJ Scougall v Chief Executive, Department of Natural Resources (1996-97) 16 QLCR 536, at 551. In the matter of McCathie, Williams J also drew reference to a previous matter in the High Court of Daandene Pastoral Company Pty Ltd v Commissioner of Land Tax (1943) 7 The Valuer 299 per Williams J at 304. The balance of whether a subsequent sale may provide useful guidance is a matter that relies upon the skill and experience of the expert valuer.
In selecting the comparable sales evidence, I am also aware of guidance provided in respect of comparable sales in Brewarrana Pty Ltd v Commissioner of Highways (SA) (1973) 32 LGRA 170, where Wells J said at page 180:
“… there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. … some adjustment is always necessary; too much adjustment will render it unsafe to use a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method. … the assessment of the risks of adjustment is peculiarly within his (the expert valuer’s) sphere of skill.”
There is one common sale at 29 Imbros Street which is clearly seen as comparable, but for the moment I will refer initially to the remaining sales of Mr Brown, which may be summarized as follows:
Sale Area Date Analyzed Value Comparison 236 Shaw Road 405 m² August 2001 $91,000 Inferior to far inferior 43 Surrey Street 400 m² September 2001 $125,000 Far inferior 40 Sugarloaf Street 400 m² May 2001 $119,000 Inferior On those comparisons the subject land is seen as having an analyzed value greater than $125,000. While Mr Brown now concedes that 43 Surrey Street in fact has a similar frontage as the subject land, he continues to argue that sale is inferior to the subject land.
If I consider then the common sale at 29 Imbros Street, I find that it has an analyzed value of $171,000, and was applied at $170,000 (99%). Mr Brown sees that sale as comparable but smaller in size than the subject land; while Mr Scougall sees the sale as superior to the subject land. On balance, considering the relevant features of both parcels, I would agree with Mr Scougall that as a single house site the 29 Imbros Street parcel has features that would make it a superior site. However as a 690 m² parcel it is considerably smaller than the subject land. It is noted that Mr Brown’s analysis of the 29 Imbros Street sale appears to have considered that sale as a 609 m² site. (Exhibit 8). Any adjustment for that error in difference in size of 29 Imbros Street compared to the subject land, beyond its true area of 690 m², would tend to weigh more towards a slightly higher unimproved value of the subject land. On those comparisons there is nothing to suggest that Mr Brown has not made a conservative allowance for the smaller size of 29 Imbros Street in his applied value of $150,000 for the subject land.
In respect of Mr Scougall’s concern that Mr Brown did not disclose his reliance upon his Sale 4 (40 Sugarloaf Street) when the judicial review response was provided on 16 August 2002, I note that Mr Brown understands that he is not limited to those few sales disclosed in that advice to Mr Scougall. In that regard I note that issue was addressed by this Court in Kallinicos & Ors v Chief Executive, Department of Natural Resources and Mines (AV2001-0231) 22 August 2002, unreported. I agree with Mr Brown that his valuation statement to this Court is not restricted to the actual selected details supplied in the letter of 16 August 2002, as an expert witness should not be precluded from forming his opinions based upon the total evidence as it appears relevant to him at the time of preparing his report.
In respect of any reliance upon the subsequent sales supplied by Mr Brown at Ridge Street and Almond Street, I find that while they were consummated prior to the date of issue of the valuation, and therefore were matters that could have been considered in forming the opinion of the relevant unimproved value of the subject land, they were also occurring during a period of moving market level. While it is within Mr Brown’s area of expertise to conclude such low applications of the analyzed sale price, the very low applications of Ridge Street (65%) and Almond Street (58%) testify to the opinion that it would be more relevantly associated with the next valuation. On that basis I get little assistance from those two sales.
Summary:
In summarizing this matter I am reminded that unless the appellants prove that the Chief Executive has made an error of fact or has followed a wrong principle, then s.33 of the Act directs that the valuation of the Chief Executive shall stand. I note also that in respect of a notice of appeal the onus is upon the appellants to prove their case (s.45(4)). That has not occurred in this matter.
Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellants have proved their case. The appeal is dismissed, and the unimproved value of Lot 1 on RP 34574 as determined by the Chief Executive in the sum of One Hundred and Fifty Thousand Dollars ($150,000) is affirmed.
NG DIVETT
MEMBER OF THE LAND COURT