Sexton v Department of Natural Resources, Mines and Energy
[2004] QLC 30
•7 April 2004
LAND COURT OF QUEENSLAND
CITATION: Sexton v Department of Natural Resources, Mines and Energy [2004] QLC 0030 PARTIES: Margo I and Patrick J Sexton
(applicants)v. Chief Executive Department of Natural Resources, Mines and Energy
(respondent)FILE NO:
AV2003/0165
DIVISION: Land Court of Queensland PROCEEDING: An Appeal against valuation under the Valuation of Land Act 1944 DELIVERED ON: 7 April 2004 DELIVERED AT: Brisbane HEARD AT: Coolangatta MEMBER Mr RP Scott ORDER: The appeal is dismissed and the valuation of the Chief Executive in the amount of Four Hundred and Five Thousand Dollars ($405,000) is affirmed. CATCHWORDS: Statutory valuations – Valuation of Land Act 1944 – Percentage increase from previous valuation – Use of lightly improved sales – Comparison by one factor alone not valid. APPEARANCES: Mr PJ Sexton for the applicants
Mr G Smith for the respondent
This matter arises under the provisions of the Valuation of Land Act 1944 pursuant to which the Chief Executive placed a value on property owned by the appellants in the amount of $405,000 as at a valuation date of 1 October 2002. The appellants contend that the value ought to be $350,000.
Patrick John Sexton appeared for and gave evidence on behalf of the appellants, whilst Gregory Patrick Crowley, registered valuer, provided valuation evidence in support of the Chief Executive's valuation figure.
The grounds of appeal relied upon by the appellants are as follows:
“1.No allowance has been made with regard to the aspect of the property – which is south to water.
2. The southern aspect is subject to strong prevailing south/easterly winds and a lack of sun in winter.
3.The property is close to two busy six lane arterial roads and a huge eight lane intersection.
4. The property does not compare with the valuations and sale prices of houses on the opposite side of our street which face the premium “north to water” aspect.
5. There is a marked variance in the value per square metre of the properties identified for comparison.”
The subject land has an area of 812 m² and is located at 15 Yunga Court, Broadbeach Waters, approximately 7 km south of the Southport Central Business District. It is in the area of the Gold Coast City Council and under the relevant planning scheme is zoned "Detached Residential". The property is described as Lot 20 on RP 160998 and, according to Mr Crowley, has no encumbrances registered on the title that would unduly affect the valuation of the land.
The subject land is in a residential canal area developed in the mid to late 1970's. The locale is one of single-unit residential development on canal frontages with lots having varying aspects and depths of view. The location is served by shopping, educational and entertainment facilities and employment centres.
Yunga Court is a bitumen sealed, concrete kerbed and channel residential cul-de-sac which, in Mr Crowley's opinion, provides good access to the subject land. The land is serviced by the usual utilities.
The subject land comprises a filled and retained canal lot with a southerly canal aspect. Its frontage is about 20.5 metres, whilst it has a depth of approximately 40 metres and a rear boundary of about 20.6 metres.
The main concern of the appellants I perceive to be the fact that the subject land is south facing. Whilst it was agreed between the parties that west-facing lots are least preferred in the marketplace, those facing to the south were listed behind those with northerly and easterly aspects.
It is a combination of the seasonal prevailing winds and the orientation of the sun during the hot summer and the cool winter which favours the northerly lots against those ranked lower on the popularity list. In short, the natural forces which no property can disregard tend to make north-facing lots more comfortable for residential purposes than those that face the south or the west, in particular. Apart from those natural features, Mr Sexton said that north-facing lots have the advantage of a view towards the high-rise buildings in Surfers Paradise which at night provide an attractive display of lights which would be, I think, a happy contrast to the more pedestrian aspects of that view during daylight hours.
Mr Sexton suggested that there would be an approximate 25% premium for north-facing lots over those with a southerly orientation, however produced no evidence in support of that contention, which was not accepted by Mr Crowley.
In his statement Mr Sexton included an annexure which listed what I understand to be values applied by the Chief Executive to each of the 20 allotments found in Yunga Court. Valuations as at the same date as the subject land under appeal were included, as well as a valuation from an earlier year.
Mr Sexton observed that for the more recent valuation date, properties facing north revealed values ranging between $310,000 to $405,000, whilst those to the south had values of $310,000 to $415,000 placed on them by the Chief Executive. That comparison revealed, in Mr Sexton's view, an error on the part of the Chief Executive in that his understanding of the marketplace is that it is the north-facing lots which ought to have attracted the higher valuations.
Mr Sexton has selected a single point of comparison for the purpose of the exercise I have just discussed, whereas it is all of the relevant points about a property that need to be taken into account in forming a view of their comparative values. I note, for example, that the values applied to the properties in Yunga Street diminish as they become closer to Bermuda Street, a source of noise complained of by the appellants. I note also that properties towards the eastern end of Yunga Street are larger than the average and have an aspect over an expanse of water. I observe also that lot sizes differ in Yunga Street, ranging from 780 m² to 1,013 m². Of the 20 lots found in Yunga Street, 14 are regular shaped rectangular blocks, whilst six have irregular shapes. Mr Crowley pointed to another factor of interest in the process of valuation and that is that the properties with a northerly outlook in Yunga Street have an aspect over a canal which is much narrower than the waterway which those to the south overlook.
The process of comparison between properties for the purpose of valuation needs to be conducted in a comprehensive manner taking into account all material factors and making adjustments where necessary, either up or down in value, to take into account the advantages and disadvantages of one property against another. See Waalt Homes v Road Construction Authority (1987) 64 LGRA 346. By concentrating on the factor of orientation to the north or to the south, Mr Sexton has fallen into error, in my opinion.
Mr Sexton settled on his suggested value of $350,000 by escalating from a previous statutory valuation. That is not an acceptable method of valuation as was made clear by the Land Appeal Court in NR and PG Tow v Valuer-General (1978) 5 QLCR 378.
Before I turn to consider some of the valuation evidence I will mention two principles that are particularly relevant in the present case. They come from the judgement of the Land Appeal Court in Grahn v The Valuer-General (1992) 14 QLCR 327 at p.328 where the Court affirmed some principles from some earlier cases. The first to which I will refer is that taken from Barnwell v The Valuer-General (1989) 13 QLCR 13 at p.16 and Fischer v The Valuer-General (1983) 9 QLCR 44 at p.46, a principle which the Land Appeal Court expressed as follows:
"The best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land."
In Grahn the Land Appeal Court made further reference to Fischer in support of a proposition expressed:
"Whilst maintenance of correct relativity is of considerable importance in rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence."
Mr Sexton made reference to seven sales that had taken place in Yunga Court between March and November 2002 for prices ranging between $566,000 and $750,000. Unfortunately, all of these sales comprise highly improved properties which are not preferred in the process of establishing an unimproved value. See para [16] above. Apart from that, no details such as measurements of the improvements on the sale properties were provided in evidence, nor was there any attempt to analyse the sales in such a way that an unimproved figure might be deduced. Accordingly, that evidence is of no assistance to me in dealing with the appeal.
Mr Sexton also included two annexures to his statement which showed statutory valuation increases expressed as percentages and as dollar figures between "1997" and "2003". One such property revealed a valuation increase of 99.8% during the six-year period referred to, whilst another showed an increase of 150%. These two examples are taken from a list of properties said by Mr Sexton to have a northerly orientation. A similar list of values for properties in Yunga Court was also included and that revealed valuation increases ranging between 79.5% for one property and 148% for another. During this period the subject property attracted a valuation increase of 125%. Mr Sexton said with respect to this information that it gave him no confidence in the Chief Executive as the statutory valuing authority. In his cross-examination of Mr Crowley he asked a number of questions seeking an explanation of the differentials in percentage increases to which I have referred, as well as other apparent inconsistencies in the schedules which he had presented.
I should say first of all that percentage changes in valuations can be the result of a variety of factors including the application of different professional opinions between different valuation dates. Not only was Mr Crowley unable to assist Mr Sexton as to why the different and apparently conflicting valuation increases were arrived at. It is not, however, the valuation system, as such, that is the subject of inquiry in this appeal, but the question of whether the appellants have demonstrated that the valuation of the Chief Executive in this particular case is wrong. That is provided for in ss.45(3) and (4) of the Act which provides:
“(3) An appeal shall be instituted by filing a notice of appeal in the Land Court registry.
(4) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner.”
Mr Sexton also made reference to a previous statutory valuation of the subject property in which an objection had been allowed by the Chief Executive for what Mr Sexton understood to be similar reasons to those advanced in the present appeal.
I accept that he achieved a reduction in value on that occasion. No published reasons for that reduction were, however, tendered to me. That is not a matter of any concern however, as the Land Court is not bound by any such decision of the Chief Executive.
Bermuda Street is a busy thoroughfare and it generates noise which Mr Sexton said impinges upon the subject property. He said that there was no "traffic barrier", which I take to be an acoustic fence designed to limit the flow of noise to residential lots. He said also that road dust, in the form of a fine black dust, is transported onto the subject property by the prevailing winds, that dust having been generated from both the Nerang/Broadbeach Road and Bermuda Street. The evidence did not reveal to me that Mr Crowley had failed to take these disabilities into account in his valuation process or that such account as he had taken of them was insufficient.
Mr Crowley, in pursuit of recognised valuation practice and consistent with principles expressed by the Land Appeal Court and referred to above, relied on lightly improved sales in his valuation approach. He included a schedule of three sales in his valuation report.
The first sale was of a property at 5 Crestview Quay, Broadbeach Waters, which has an area of 556 m² and sold for $397,000 on 4 September 2002. Mr Crowley took into account the cost of demolition of the dwelling that had been on the land at the time of purchase and deduced an analysed unimproved figure of $376,920 for the sale property. The applied value as at 1 October 2002 was $330,000.
In his comparison between Sale 1 and the subject land Mr Crowley said that the sale property had an inferior situation being in an older canal development in the locale of poorer quality homes and very narrow canals, whilst access and services were similar between the two properties. He noted that the sale property was smaller than the subject and concluded that it was therefore inferior in that respect. Overall then, he saw the sale property to be inferior to the subject - a conclusion which the evidence supports.
Mr Crowley's Sale 2 is located at 66 TE Peters Drive, Broadbeach Waters. The property has an area of 556 m² and sold on 5 August 2002 for $350,000. Mr Crowley deduced an unimproved figure of $324,330, whilst the applied value for that land at 1 October 2002 was $290,000. He opined that the situation of the sale property was inferior to the subject, as was its land, for similar reasons in both respects to those given regarding Sale 1. He said that the sale property was inferior to the subject land with respect to the sale's frontage to TE Peters Drive which is heavily trafficked. Mr Sexton said that TE Peters Drive is not as busy as Bermuda Street, but agreed that it is busier than Yunga Court. He mentioned that the property is presently for sale, though he gave no evidence as to the asking price.
The third sale property included in Mr Crowley's valuation is located at 1 Allambi Avenue, Broadbeach Waters, has an area of 739 m² and sold on 28 February 2992 for $475,000. He deducted $34,920 for improvements, yielding an unimproved figure of $440,080 which was applied by the Chief Executive at $400,000 as at 1 October 2002.
This sale property also, in Mr Crowley's opinion, is located in an older canal development comprising poorer quality homes than in the case of the subject and in that respect is inferior in his view. Whilst access and services are said to be similar between this sale property and the subject, Mr Crowley formed the view that the smaller size and the battleaxe shape, as well as the westerly aspect of the sale property, meant that it was inferior to the subject in terms of land content.
In his opinion the subject property ought to have a value higher than this Sale 3, guided also by the other two sales. Mr Sexton offered the general comment that the three sale properties referred to by Mr Crowley are too far away from the subject land to make them reliable bases for valuation purposes. Whilst that criticism may have some merit, I have no difficulty in concluding that the sales evidence and the valuation comparisons provided by Mr Crowley constitute the best valuation evidence placed before me. I also conclude that the appellants were not able to convince me that Mr Crowley had made any substantial error of fact, valuation technique or law which would undermine the valuation figure concluded by him.
Mr Sexton referred to a "percentage application" method of valuation which he suggested ought not to be employed. I suspect that this is a reference to what is commonly called the mass appraisal system. Evidence of the application of that system was not placed before me, nor was it one which Mr Crowley relied upon in his valuation approach.
The appeal against the Chief Executive's valuation of the subject land is dismissed and the valuation of the Chief Executive of Four Hundred and Five Thousand Dollars ($405,000) is affirmed.
RP SCOTT
MEMBER OF THE LAND COURT
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