Shaw v Chief Executive, Department of Lands

[1996] QLC 70

[1996] QLC 70

 

  LAND COURT

BRISBANE

31 MAY 1996

Re:     AV95-506
  An appeal against an unimproved valuation -
Valuation of Land Act 1944 -
  Local Authority:        Warwick

Leslie V and Kaye L Shaw
  v.
  Chief Executive, Department of Lands

(Hearing at Warwick)

D E C I S I O N

Preliminary Point of Jurisdiction
           When this matter was called on for hearing a submission was made on behalf of the respondent that the Court did not have jurisdiction to hear the appeal for the reason that Mr and Mrs Shaw were not the “owners” of the land at the time.  The relevant date of valuation was 1 January 1995 while the date from which the valuation took effect was 30 June 1995.  Subsequent to the valuation being notified in terms of the Valuation of Land Act 1944 (the Act) Mr and Mrs Shaw objected to the valuation. The objection was disallowed. Then Mr and Mrs Shaw exercised their rights to appeal against that decision to the Land Court. The appeal was lodged within the prescribed time on 3 October l995. The appeal was duly set down for hearing on 1 April 1996. However, in the period between the date of lodgment and the date that the matter was set down for hearing the appellants had sold the property - on 8 January 1996. The date of possession was 25 January 1996. The new owners were Ms Glenys V Hughes and Mr Allan Richardson. It appears that Mr and Mrs Shaw did not advise the purchasers that an appeal against the unimproved valuation was current. They had not been invited to join with the appellants. The Department had made contact with the new owners and was informed that they had no intention of proceeding themselves with the appeal.
           The Department took the view that as the original appellants were not the owners of the property at the date at which it was called on for hearing then they were not entitled to proceed with the appeal.  That opinion was said to be based on a decision of a former President of the Land Court, Mr DM White, in an appeal made by the Estate of John Staunton against a determination of the Valuer-General as reported in QLCR (1988-89) at pp.326, 327.  Mr White had stated that the only person given rights under the Act to contest the valuation was the owner in fee simple.  He had concluded that when this is considered with what is now s.46 of the Act which gives new owners (that is, where a change in the ownership of the land occurs subsequent to the issue of a notice of valuation) certain rights to carry on with an objection or appeal, that right, in his opinion, narrowed to the person who is the registered proprietor of the estate in fee simple.
           Section 46(2) of the Act states:

“If an objection or appeal as aforesaid was made or instituted by the former owner prior to the change in ownership then the new owner shall have the right to carry on in the new owner’s own name that objection or appeal but the new owner shall not be entitled in that case to himself or herself make or institute a fresh objection or, as the case may be, appeal.”

The Act is silent as to the rights of the former owner, particularly in those cases where the new owner has no desire to continue with the appeal.
           Now it seems to me to be reasonable that where a property is sold and the date of possession or settlement is prior to the date on which the valuation takes effect that the Department might argue that the former owner has no interest in the land and/or the appeal.  However once the valuation has come into effect then the former owner has been responsible for the levies made on the basis of that valuation until the date of settlement of the sale.  It seems reasonable then that he should be in a position to protect his rights to challenge the valuation base for those levies. 
           That is basically the submission of Mr and Mrs Shaw.  I reserved my decision in that matter but because of the convenience of having the parties together it was decided to hear the merits of the case in the event that jurisdiction was found to lie.
           It is now my considered decision that the former owners do have the right to continue with the appeal when the new owners do not elect to continue in their own behalf or to join with the former owner as an interested party.  Jurisdiction has therefore been found to lie.
The Merits of the Case
           The land subject of the appeal is described as Lot 2 on Registered Plan 18305, Parish of Emu Vale, containing an area of 27.52 ha.  As at 1 January 1995, the Department found the unimproved value of the land to be $20,000 on the basis of a site value.  The appellants’ estimate of value was $15,000.  The grounds of the appeal are as follows:

1.        Nature, size and type of land.

2.        Condition of access road.

3.        Arbitrary type of decision to raise valuation.

4.        Lack of services.

Mr Shaw gave evidence in support of the appeal.  He described the land as being a steep, stony, scrub-covered type with deep water erosion gullies.  He said that the property is a rural retreat and not a proposition for farming of any commercial nature.  Mr Shaw said that there were 11 crossings of the Condamine River necessary to gain access to the property.  Of those crossings 10 are always under water to a depth of between 150 and 200 mm in dry times but in wet times the road is completely impassable by his particular vehicle.  He described the remainder of the road as not being as good as many tracks found on rural properties and this state of affairs had existed for many years.  Abnormal maintenance was required on vehicles travelling the road due to the poor surface which contained deep holes and protrusion of rocks.  Mr Shaw saw the decision to raise the valuation from its previous level to be an arbitrary decision - the word “arbitrary” meaning “without regard to rules or principles, absolute, unjust”.  He did not believe that the increased valuation took into account the “static and declining real estate values found in the area in which my property is located.  In fact, real estate values, as depicted in sales where sales occur, show a decline in prices.”
           In support of his opinion that the increase in valuation was the result of an arbitrary decision, Mr Shaw provided historical records relating to the valuation of the property, the increasing rate burden, the opinion of a commission agent in Killarney that values in the area had not risen in the two years preceding September 1995, a letter from an owner of property in close proximity also pointing out the road and access disabilities and advising that the valuation of that property was only $17,500.  Mr Shaw had obtained statistics from the Real Estate Institute of Queensland as to the volume and average sale prices of certain types of vacant land and housing in Warwick and Brisbane.  Included as further support of the declining volume of sales Mr Shaw provided a number of press clippings to that general effect. 
           With regard to lack of services Mr Shaw suggested that the cost of providing electricity to the site would be $35,000, that there was no garbage collection, school bus, reticulated water, no mail delivery or radio telephone services.  During his period of ownership of the property the position had not improved.  While he agreed that the very lack of services was one of the features of the property that had attracted him and a certain class of buyer, he did not believe that the actual lack of services had been taken into account when determining the valuation and saw the reason to demand a “fair go” concerning the rates he was required to pay and the services he was prepared to forego. 

The valuation appealed against was prepared by Mr AB Cowley, registered valuer employed by the Department.  He described the property as being located about 9 km north-east of the Town of Killarney.  Access is via the earth and gravel Condamine River road, which can be flooded out.  He referred to the number of crossings of the Condamine River involved and the necessity for four-wheel drive transport.  He described the land as being easy to moderate sloping forest and scrub which has an attraction due to its scenic location and isolation.
           While he agreed that it was not ideal comparable evidence, Mr Cowley had provided details of two sales of rural homesites in the general locality.  At the relevant date he said that there was no sales evidence in the immediate Condamine River Road locality.  The two sales were in Watts Road, Killarney and Top Swanfels Road, Swanfels, of a 40 ha site showing an analysed unimproved value in April 1994 of about $48,000 and a 9.126 ha site in July 1994 for an analysed unimproved value of $28,000 respectively.  He said that the overall sales evidence in the locality and the shire indicated an increased level of value in the range of 15% since the previous valuation and this factor had been adopted in the increased valuation of the subject property.  The two particular sales had been of somewhat superior type properties mainly due to access and closer proximity to Warwick but Mr Cowley was confident that sufficient allowance had been made for the particular disabilities of the subject land.  He agreed however, as Mr Shaw had suggested, that the disabilities themselves placed the site in a particular market class of rural retreat.
           During Mr Shaw’s evidence he had said that the land had been sold in January 1996 with a shed, some internal access construction and improved fencing for $62,500 after he had purchased it some years earlier from a friend for $47,000.  Because of the dates involved that information had no particular relevance to the valuation applied as at 1 January 1995.  However it indicates to me the likely reason why the new owners did not wish to join with the appellants in prosecution of  this appeal.  As it turns out, Mr Shaw’s main contention was that there was no evidence to support the arbitrary decision to increase the valuation from the previous level when in fact it was widely reported that there was a decline instead in the local real estate market.
           It is unfortunate that the financial affairs of Mr Shaw as he advised the Court were of such nature that he has difficulty in meeting various increased costs through inflationary pressures.  The task of the Court is however to determine the unimproved value of the land.  That term means in relation to the Act - 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.  Any fair-minded person when aware of the details of the purchase and resale of this land by Mr and Mrs Shaw could hardly be convinced that the Department’s valuation is anything but reasonable. 
           I am satisfied that Grounds 1, 2 and 4 of the appeal were matters taken into consideration in that valuation and that the suggestion that it was an arbitrary type of decision to raise the valuation was not proved based on the evidence given by Mr Cowley. 
           The appeal is dismissed and the valuation of the chief executive affirmed.

RE WENCK
  MEMBER OF THE LAND COURT