Shaw v Chief Executive, Department of Natural Resources and Mines
[2001] QLC 70
•18 July 2001
LAND COURT BRISBANE 18 July 2001
[2001] QLC 70
Re:Appeal against annual valuation Valuation of Land Act 1944 Property ID No: 365698 Local Government: Esk Shire (AV00-41)
Ian Shaw v.
Chief Executive, Department of Natural Resources and Mines
D E C I S I O N
Background:
This matter relates to land at Muckerts Lane, Vernor via Fernvale, and described as Lot 4 on RP 136558, Parish of North. The subject land has an area of
4.054 hectares and is located about 3.3 kilometres by road south of the Fernvale State School, and a further 2 kilometres from Fernvale Township, and is 5.5 kilometres east of the Lowood Post Office.
Good access is available from Muckerts Lane which has a light potholed bitumen sealed carriageway towards old Fernvale Road to the north. Alternative unsealed access is more directly available to Ipswich from Muckerts Lane to the south towards Clive Street. The light bitumen seal in Muckerts Lane ends at Lot 6, two lots removed to the south of the subject land. Telephone, electricity and reticulated town water are connected and refuse disposal is available.
The subject land is zoned “Rural A” under the Town Plan of the Esk Shire of 19 June 1992, effective at the date of valuation of 1 October 1998. The key issues are the history of the appeal, nature of the land, use of the land, relativity and comparison of sales.
On 22 March 1999 the Chief Executive issued a valuation of the subject land at $56,000. Following an objection on 26 April 1999, the Chief Executive confirmed that figure on 11 February 2000. The appellant has now appealed that figure claiming the unimproved value should more properly be $42,000. Ian Shaw appeared and gave evidence on his own behalf. Mr J O’Rourke, Principal Legal Officer, appeared for the respondent, calling evidence from Edwin George Ridley, the departmental registered valuer responsible for determining the valuation.
The Evidence:
The History of the appeal –
This appeal has been the subject of considerable difference between the parties involving protracted lengthy actions under the Judicial Review Act 1991, and the Acts Interpretation Act 1954. Fundamental to the differences between the parties would appear to lie in understandings obtained as a consequence of those interlocutory processes, and I will therefore document the history of the appeal in order to help clarify the matter.
The appellant had formerly appealed to this Court against a valuation of the subject land at 31 March 1987. That matter was determined by this Court in I Shaw v. the Valuer General (AV89-1) 31 October 1989, unreported, where the appeal was rejected. During that matter the use of the subject land had been argued as to whether it satisfied the then Section 11(1)(vii) of the Act for primary production purposes (now Section 17). Because of concerns with invasion of privacy, Mr Shaw had declined to provide evidence of actual financial records, relying only upon evidence that the land had been accepted by the Australian Tax Office as use for primary production purposes. In the absence of documented evidence the learned Member rejected the claim for use for primary production.
During the evidence in that matter Mr Shaw outlined problems with the subject land, including the access road, water scouring of the land, and erosion along a neighbour’s fence. The respondent’s valuer had noted the erosion problem along the rear of the northern boundary, and had made allowance for that matter in her valuation (page 3). In the end the learned Member valued the subject land as a rural home site. The respondent’s valuer had noted that the site was largely composed of poor soils
with about 5,000 m2 of better dark soils near a gully.
I note also that Mr Shaw had previously on 15 September 1998, sought a Statement of Reasons for disallowing a previous objection against a valuation at 1 October 1997. That Statement of Reasons was provided by the respondence on 18 October 1998, and included, among others, advice in respect of matters now raised in the current matter. Those included use of the land for rural residential purposes, use for a single dwelling house under section 17, impact of aircraft, nature of the soil, incidence of greyhound kennels, a drainage easement, and erosion impacts. The Statement of Reasons also noted that the factors had been addressed through four previous objections and the appeal to this Court (AV89-01). The valuation at 1 October 1997 was $56,000, similar to the unimproved value now appealed.
In respect of the current matter, when Mr Shaw objected to the Chief Executive on 26 April 1999 and 21 May 1999, he formally requested under section 7 of the Judicial Review Act all relevant information used in determining the unimproved value of the land. That objection was acknowledged on 29 April 1999, and a Statement of Reasons was provided on 20 December 1999.
On 4 January 2000 Mr Shaw wrote to the Esk Shire Council in respect of the categorisation of the subject land. The Council responded on 11 January 2000 advising that the categorisation of the land was in accordance with land use codes determined by the respondent, and any request by the appellant to change the classification of the subject land should be exercised through the respondent. That advice from Council confirmed that the primary land use code for the subject land was “05 – large home site”.
On 25 September 2000 the appellant wrote again to the respondent seeking a further Statement of Reasons with respect to the valuation of the subject land. On 29 September 2000 the respondent replied, noting that there had been no annual valuation of the Esk Shire at 1 October 1999, and valuations current at 1 October 1998 still applied to the subject land. The respondent confirmed that the circumstances outlined in the Statement of Reasons provided for 1 October 1998 remained unchanged.
However the copy of the Statement of Reasons of 20 December 1999 attached to the respondent’s letter of 29 September 2000, differed in some details to the previously Statement of Reasons provided. The new Statement of Reasons identified 11 Sales of properties which were seen as comparable, including four Sales not previously provided in the Statement of Reasons for the 1 October 1997. It is noted that four of the original seven Sales had applied unimproved values different to those previously supplied. This lack of consistency in the Statement of Reasons is a concern to Mr Shaw.
However those sales were included merely as material upon which considerations of the valuations were based, and the Statement of Reasons was focussed on how the valuation was undertaken, the impact of Land Court rulings, use under section 17 for “farming” purposes , the Land Use Codes, how the sales were analysed, and that no specific allowances were made in the valuation.
In attempts to resolve the matter Mr Shaw had sought an objection conference with the respondent, and also a preliminary conference under the chair of this Court. For whatever reasons neither of those had eventuated, and Mr Shaw is concerned that
delays in resolving the issue may have an adverse impact upon the level of his rate charges paid to the Council.
The nature of the land –
There was considerable discussion between the parties in respect of the nomenclature of terms applying to the nature of the land. However it is agreed that the subject land is impacted by run-off waters from road works across Muckerts Lane, and concentrated around an Easement B (area 400 m2 in the south eastern corner of the subject land. Those waters tend to impact up to 50 percent of the front of the land during heavy rains, and would impact any buildings in that area. That would appear to be supported by the location of the existing dwelling on the subject land well removed towards the rear of the parcel (Exhibit 12).
In respect of the type of soils I note that Mr Shaw sees those as mainly sandstone and sandstone rock, while the former valuer, M/s Newman, saw the soils as largely poor in quality. Mr Ridley now however sees the soil as suitable for rural residential purposes, noting the current uses of the land. On balance I see no real difference in those assessments for the purpose of the valuation.
In respect of any impact from overhead aircraft noise, it is accepted that the subject land is located approximately just west of the extended flight path of aircraft approaching the Amberley Air Base, about 21 kilometres north of the actual runway. It is accepted that Defence aircraft commence descents from an area near Wivenhoe Dam to the north of the subject land. It is also agreed that noise exposure forecasts generally indicate a higher level of noise exposure on approach flight paths compared to areas outside of those paths such as at Ipswich.
However there was no documented evidence of noise intensities, and I see no reason why any adverse noises would be any worse at the subject land compared say to the sales supplied by Mr Ridley. On that basis there is no quantifiable reason why Mr Ridley has not adequately allowed for any undue impact of noise upon the subject land. Indeed that was noted in the Statement of Reasons provided to Mr Shaw.
The problem of the soil erosion towards the rear of the subject land, covering an area of about five times greater than the drainage easement, or about 2,000 m2, is agreed by both parties. The difference between them is that Mr Shaw believes that no separate allowance has been made for that disability. Mr Ridley argues that an allowance had been built into the valuation when Ms Newman valued the property previously, and Mr Ridley has maintained that allowance and relativity with the adjoining parcels, which are also affected by erosion. Mr Shaw argues that Lot 5
(Schimke) to the south-east does not suffer from the same erosion or weed infestation as the subject land. Mr Ridley argues that the $2,000 allowed on the subject land was provided for any erosion problems and the water runoff from Muckerts Lane drainage. He notes that the impact of erosion was perhaps overlooked when the Statement of Reasons was prepared on 20 December 1999, noting the erosion impact had been identified in the 1 October 1987 decision (AV89-01).
In the matter of any impact of noise from the dog kennels to the north-east, Mr Shaw sees that as matter of local concern, and therefore a factor which would impact the value of the subject land. Mr Ridley was aware of those kennels, but argues that any disability from noise was also likely to be reflected in the price paid for Sale 1, which is across the road from the dog kennels in Taree Road. Mr Ridley’s enquiries with the purchaser of Sale 1 in April 2001 reveals that the kennels were not seen as causing any adverse impact in the market place, and he had therefore made no further allowance for that purpose. Mr Ridley argues anyhow that if there had been some adverse impact, which he is advised that there was not, then that would have been reflected in the price of Sale 1 which is closer to the kennels.
Mr Shaw argues that subsequent to the date of Sale 1 (11 June 1997), an application to extend the operations at the kennels was lodged with the Council on 25 June 1997. He argues that this has increased the impact of noise from the larger kennels, and would have an increased impact on 1 October 1998. Mr Ridley accepts that the increase size of the kennels occurred subsequent to Sale 1, but notes that the kennels had been in the locality for some time prior to the date of valuation 1 October 1998. Mr Ridley confirms that the purchasers of Sale 1 (Mayer) feels he paid a fair price for that property, including any impact from the kennels either at the date of sale, or after the kennels were enlarged.
The use of the land
A key difference between the parties is the manner in which the use of the land has been assessed for valuation purposes. Mr Shaw argues that the respondent had incorrectly interpreted the use of the land as for “Rural Residential” purposes under Section 17 of the Valuation of Land Act 1944 (the “Act”). Mr Shaw contends that the subject land is zoned as Rural A under the Town Plan of Esk Shire, and under that zoning there are a variety of uses permitted for the land, in additions to its use for purposes of a dwelling house, or for home occupation.
Mr Shaw notes also that Section 17 of the Act relevantly directs that where land is to be valued under that section, then the land is to be “exclusively used for the
purposes of a single dwelling house”. Mr Shaw argues that the area of the subject land is 4.054 hectares, and it would virtually be impossible for a dwelling to occupy exclusively such a large area. Mr Shaw therefore sees the area for exclusive use as a “single dwelling house” to refer only to that part of the area of the subject land.
Mr Shaw argues that the words “exclusively used” preclude any use of the abutting subject lands as being ancillary to the dwelling house, and he therefore concludes that the remainder of the subject land should be assessed for some other use. Because, in his opinion, the Chief Executive has incorrectly valued the subject land, Mr Shaw draws support from Section 39 of the Act which directs that “where no valuation has been carried out, then the unimproved value as previously determined correctly should continue in force”. On that basis he contends for an unimproved value of $42,000 which was the value prior to the commencement of annual valuations.
In support of his conclusion in respect of the actual use of the subject land, Mr Shaw seeks guidance in a variety of legislative directions dealing with land and its use in Queensland. Those include the Land Act 1994, the Local Government Act 1993, the Acts Interpretation Act 1954, the Integrated Planning Act 1997 and the Valuation of Land Act 1944. He notes that those acts provide for permitted uses under a planning scheme, and also enshrine the principles that should be adopted in determining the value of land. Mr Shaw notes that under the Local Government Act the Esk Shire Council is charged with categorising lands within its area of control for the purposes of the rating of the land.
Mr Shaw argues that in order for the Esk Shire to have at its disposal for rating purposes an accurate property data base for all lands in the Shire, then any appraisal of the subject land must contain all relevant uses of that land. The recognition of multiple uses of land he argues is supported by the actual departmental administrative tool adopted by Mr Ridley of a land use code of four digits, where the last two digits denote the secondary use code for the land. In respect of any secondary use code for the subject land, Mr Shaw argues that was omitted on the property data base for the Shire, as the only code provided for the subject land was code 05. He argues such a single code does not balance all of the different aspects of the land.
Mr Shaw further argues that as the Valuation of Land Act directs in s. 3(1)(b) that the subject land is to be valued as if the improvements did not exist, then it is not appropriate to treat only what might be seen as the primary use of the vacant land. He
argues that it should be valued for any purpose that is legal under the existing provisions of the Town Plan.
In support of his understanding of the meaning of the legislature on this matter, Mr Shaw draws reference to court precedents in respect of adopting the meaning of the language of the legislation as directed by the Parliament. He notes that the Act is very clear in that the land is to be valued for any purpose for which it is used, or it could be used. (section 3(4)(a)). Mr Shaw notes that it is an incorrect reading of the Act to merely value the subject land as a site for a single unit dwelling, and to ignore the other uses to which it could be placed.
The need for absolute clarity of meaning was addressed by the High Court in Re Bolton & Anor; ex parte Beane (1987) 162 CLR 514 at 518. In that matter the use of the second reading speech by the Minister introducing the legislation was distinguished from the actual will of the Parliament, as expressed in the law. Mr Shaw argues that the use of any departmental interpretation of the use of the land, as enshrined in the extrinsic material such as a land use code, rather than its use as permitted under the law, is not correct. He notes that principle is followed in Cairns Shelfco No. 16 Pty Ltd v State of Queensland (1998) 1 QdR 228, at 243 per Pincus JA.
In that matter the use of extrinsic material in the form of a ministerial speech was tested in respect of s. 14(B) of the Acts Interpretation Act 1954, and the desirability of an ambiguous provision of the Act being interpreted as having its ordinary meaning. In Cairns Shelfo, the meaning adopted by the respondent was one seen as unlikely to occur to a reader of the statute, and therefore not its ordinary meaning.
In interpreting the legislation in respect of the permitted use of the subject land, Mr Shaw notes also that it has been found that “the courts should not impute to the legislation an intention to interfere with fundamental rights” (Coco v The Queen (1993-94) 179 CLR 427, at 437.) That is however conditioned by the statement “without expressing its intentions with irresistible clearness”. (Bropho v. West Australia (1990) 171 CLR 1 at 18. In the current matter Mr Shaw argues that the permitted use of the land is clearly defined by statute, and no extrinsic material is necessary to define its purpose. Mr Shaw argues that the land is being used for agricultural purposes which fall within the land use code 05 as adopted by the respondent. However he does not claim that the subject land is being used for “farming” purposes under section 17 of the Act.
Mr Shaw advises that he uses the land as a residence, to run a few head of cattle, for the growing of a few fruit trees, and for the breeding of dogs. He notes the difference in the definition of the zoning for Rural and Residential as defined in a subsequent amendment to the planning scheme, but argues that rural residential zoning did not appear in the 1992 Planning Scheme. Mr Shaw is a member of the local planning advisory group, and is familiar with current proposed changes for the creation of planning precincts. Mr Ridley rejects that comment, noting that a rural residential zone was effective at the relevant date, although not for the subject land.
Mr Shaw argues that the subject land could not be valued as rural residential at 1 October 1998 because the land is not zoned for that purpose at that date. However he concedes that in general terms, depending upon the intensity of use, the subject land could have been used for purposes which could have been referred to as a rural residential home site. Mr Shaw was not familiar with the current amendment of 1 October 2000 to section 17 of the Act, which may not preclude his future use for “farming” purposes. However that would need to be assessed at some future time, and would require substantiation of the details of the property by the appellant.
In respect of the actual zoning of the subject land, Mr Ridley argues that the zoning does not play a significant role in the current matter. He argues that in both Rural A and Rural Residential zones there is provision for a district standard of use in that area which is to the construction of a single unit dwelling. On that basis Mr Ridley argues that a prudent buyer would see potential in the subject land for use as a single unit dwelling, and he has valued it accordingly at its highest and best use for that purpose.
Relativity -
(35) Mr Ridley advises that current relativities of parcels in Muckerts Lane have been established for several years, and show that Lots 2, 3, 5 and 6 adjoining the subject lands both to the north-west and south-east have unimproved values of
$58,000 for similar areas for 4.054 hectares to 4.06 hectares. The subject land is valued at $56,000 reflecting the allowance provided by the respondent ($2,000) for the impact of erosion and flooding noted previously. Mr Shaw argues that the Statement of Reasons supplied to him suggests that the $2,000 related only to the flooding problem, and he seeks further reduction for the other disabilities.
Comparison of sales -
In determining his valuation, Mr Ridley relies upon the following sales of vacant or lightly improved lands, which he argues represent a wider range of comparable sales in the area:
· Sale 1 – (Taree Roads – Edwards to Marechal and Mayer – Lot 2 on RP 138052). This is a 4.213 hectare Rural A parcel located about 1 kilometre north of the subject land, with access to Taree Road which is bitumen sealed. The sale is an elevated parcel, with views to the north- east. Extensive earthworks have been necessary to bridge a sharp gully crossing the sale from south-east to north-west. The owners have subsequently built towards the rear of the lot, removed from Taree Road. The sale has a slightly superior location, similar services, slightly larger in size and seen overall as superior due to the better building site now available. The sale sold in June 1997 for $75,000, was analysed at
$65,300, and applied at $58,000.
· Sale 2 – (Fairfield Road- Rix to Perrett – Lot 33 on RP 180767). This is a 4,034 m² rural residential parcel, located about 6.6 kilometres west of the subject land. The land is cleared, formerly brigalow softwood scrub slopes, fronting Fairfield Road which is bitumen sealed. The lot is slightly above road level, with good elevation and similar utility services available.
The sale has an inferior location, similar access and services, and a superior outlook. It is seen as inferior overall due to its smaller size and inferior location. The sale sold in October 1997 for $35,000, was analysed at $34,000, and applied at $29,000.
· Sale 3 – (Fairney View – Fernvale Road – Denning to Chapman – Lot 224 on CP 891999). This is a 1.058 hectare Rural A parcel located about 3.3 kilometres east of the subject land. The sale is triangular in shape, fronts gravelled surface Fairney View – Fernvale Road, is at road level with medium elevation, and a slight cross fall to the north. The sale is in an inferior situation, being impacted by vehicular noise from the Brisbane Valley Highway, and has inferior access and outlook. Overall the sale is seen as inferior due to its smaller size and inferior situation.
The sale sold in November 1998 for $37,5000, was analysed at $35,850, and applied at $30,500.
· Sale 4 – (Forest Hill – Fernvale Road – Pitt to Maher - Lot 6 on RP 204056). This is an 8,073 m2 Rural Residential parcel located about 8 kilometres west of the subject land. The sale fronts a bitumen sealed road, has moderate elevation, and a slight fall towards the rear. The sale has an inferior situation and outlook, and is seen overall as inferior due mainly to its smaller size and inferior situation. The sale sold after the
relevant date, but demonstrates stability in the market place at that time.
The sale sold in February 1999 for $41,000, was analysed at $40,600, and applied at $38,000.
To support his assessment of the unimproved value Mr Shaw draws attention to the recent sale of an improved parcel two lots removed to the north of the subject land (Lot 2) for $140,000. Mr Shaw notes that sale involved a new house, more productive soil and a spring-fed dam, however he provides no estimate of the added value of the improvements upon that sale.
Mr Shaw also seeks some support from a reduction of $8,000 in the unimproved value of a rural property in Green Street, Lowood, which he argues demonstrates that the market value for lands in that area has fallen by 20 percent. However Mr Ridley advises that reduction in unimproved value reflected sales in that locality, which demonstrated that unsewered lots were in less demand there than sewered lots within the confines of the Lowood town area. Mr Shaw rejects comparisons of rural parcels with residential lots, however Mr Ridley argues that the Green Street property provides no evidence to support a 20 percent fall in values in the locality of the subject land.
In his appraisal of 11 sales provided in the Statement of Reasons, Mr Shaw has sought comparisons on a per hectare basis. Mr Shaw rejects one of those sales because of its much smaller size and correspondingly higher rate per hectare. He then seeks to average the rate per hectare concluding a rate per hectare for the unimproved values of those sales on that basis at $9,779.19, and an average for the sale prices at
$13,827.72 per hectare. Adopting a mean of those rates he concludes an unimproved value of the subject land at $42,000.
To further demonstrate that in his opinion the respondent has made an error in the unimproved value of the subject land, Mr Shaw seeks support in two valuations undertaken for the Esk Shire Council. Those valuations were provided by private registered valuers, both of whom estimated the combined value of two separate residential parcels at $9,500 and $10,000 respectively. To support that claim, Mr Shaw provides copies of minutes of an ordinary meeting of Council in December 2000 (Exhibit 11).
However those minutes reveal that the valuations were obtained as part of an administrative process by Council for recover outstanding arrears of rates totalling
$3,466.85. The statements and the minutes of Council conclude that “the low valuations make sale prospect realistic”. While Mr Shaw argues that the valuations apparently were supplied by registered valuers, the lack of detail of those parcels, and
the circumstances of their intended purpose, suggest that little reliance could be placed upon such assessments of value of those lands. On that basis I get no assistance from those hearsay valuations in the current matter.
In considering Mr Ridley’s Sales 2, 3 and 4, Mr Shaw argues that those bear no relationship to the subject land, as they represent residential parcels. He notes that to compare such lands on a pro rata basis, he would conclude values for the subject land at prices clearly absurd, and he rejects those sales accordingly. He also argues that inappropriate allowance has been made for the impact of the kennels upon Mr Ridley’s Sale 1. However if Mr Ridley has in fact not made adequate allowance for noise from the kennels in his analysis of his Sale 1, and its impact upon the subject land which is further removed from the Kennels, then further adjustment was likely to increase any concluded value of the subject land. On balance I believe any potential noise from the kennels would be more apparent at Sale 1 than at the subject land, and that would be reflected in the price paid for Sale 1.
Mr Shaw also provides a statement from the vendor of Sale 3 (Mrs Denning) outlining her opinion about the impact of traffic noise, and the nature of that parcel. Mr Ridley has no dispute with those statements and was in fact aware of the matters raised. Mr Ridley advises that the statement has no further impact upon his assessment of that sale, and comparisons drawn with the subject land.
Decision:
The nature of the land –
I believe there is common understanding in respect of erosion, the general nature of the soils and the impact of flooding from run-off waters along Muckerts Lane. There is some difference in respect of the impact of aircraft noise. However lack of quantification upon the subject land, compared to any corresponding impact upon the sales supplied, provides no basis for not accepting Mr Ridley’s advice that noise impacts have been considered in the final valuation adopted.
The difference between the parties in respect of whether some allowance has been provided for the erosion, lies in how that impact has been assessed. On the evidence provided to the former appeal (AV89-01), the erosion was considered by the valuer (Ms Newman) when she established relativity with adjoining parcels. That relativity has only subsequently been amended to allow for the flooding from Muckerts Lane ($2,000). On that basis I see no grounds for further adjustment for the erosion problem, irrespective of whether it was included or not in the Statement of Reasons. The evidence given to this Court supports that conclusion.
The use of the land -
In respect of the interpretation of Section 17 as it relates to the use of the subject land as “exclusively used for the purposes of a single dwelling house”, I note that the use of land for such a purpose has been addressed by the courts. It was argued in the matter of Alister FM Boyd & Ors v. Chief Executive, Department of Natural Resources (AV98-267) 4 December 1998, unreported, that any additional secondary use of land should be reflected in their unimproved values, similar to that now proposed by Mr Shaw.
In that matter the Court found at page 7:
“However, while that conclusion may have a certain logic, the reality in the market place is that people buy rural homesites for a variety of reasons. Some select parcels for their views, isolation and privacy, while others seek an area to run a horse or other animals. But whatever the purchaser’s particular expectations, all potential purchasers compete in a single market in a locality for a rural homesite. The outcome of that market is that people often pay as much for only a single land use capability, if that is their prime objective”.
The matter of a subsidiary or second use of any rural home site was, also noted by Wells J, in Crouch v. Minister of Works (1979) 36 LGRA 254 at page 256:
“The owner of a farmlet does not, however, see his land simply as part of the assets of a professional farming venture; he sees it as a rural living block; farming is undertaken by him as a subsidiary activity – in some cases, almost as a pretext.”
I note also the findings of AT Dewar v. The Valuer General (1980-81) 7 QLCR 112, where the Land Appeal Court noted at page 114:
“The term ‘rural homesite’ is a widely accepted and commonly used expression in the real estate profession. The term recognises the trend in more recent times where people are seeking to escape the confinement, bustle, noise, pollution, etc., of smaller allotments within the high density residential areas of cities and towns and are buying lands in a rural setting on the outskirts of towns and cities whereon to build their homes and either live in a pleasant rural setting or engage, part time or full time, (and to varying degrees as they choose) in some form or forms of rural hobby or pursuit.”
The Land Appeal Court further noted at page 115:
“The market for rural homesites demonstrates that they are purchased on a site basis and not on a pro rata per hectare basis.”
That was also held by the Land Appeal Court in DF and M Ward v. The Valuer- General (1983) 9 QLCR 48, at page 50.
While Mr Shaw’s examination of alternative legislation in respect of how the use of the subject land should be assessed, I note that primary direction in this matter is to be found in the Valuation of Land Act 1944, in particular 3(4)(a) which relevantly states:
“3(1) For the purposes of this Act - “unimproved value” of land means -
…
(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.
…
(4) Notwithstanding anything contained in this section, in determining the unimproved value of any land it shall be assumed that -
(a)the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, at the date to which the valuation relates;”
I note also that where the land is assessed under Section 17 to be “exclusively used for purposes of a single dwelling house”, then the words “exclusively used” may be interpreted as follows. Firstly the use of the subject land is taken to refer not only to where the land is actually used such as with a residence or building, but also where the land is retained in its virgin state for the special purposes of the owner of the land. The use of the interest in the land is therefore more expansive than just the actual occupation of the land.
That was defined by the Privy Council in Newcastle City Council v. Royal Newcastle Hospital [1959] 1 All ER 734, where Lord Denning said at page 735:
“An owner can use land by keeping it in its virgin state for his own special purposes. An owner of a powder magazine or rifle range uses the land he has acquired nearby for the purposes of ensuring safety even though he never sets foot on it. The owner of an island uses it for the purpose of a bird sanctuary even though he does nothing on it, except prevent people building there or disturbing the birds.”
Lord Denning went on to examine the meaning of the word “occupation” of the land and said at page 736:
“But legal possession is not the same as occupation. Occupation is a matter of fact and only exists where there is sufficient measure of control to prevent strangers from interfering; … there must be something actually done on the land, not necessarily on the whole but on part in respect of the whole. No one would describe a bomb site or an empty unlocked house as ‘occupied’ by anyone; but everyone would say that a farmer ‘occupies’ the whole of his farm even though he does not set foot on the woodlands within it from one year’s end to another.”
I note also that “exclusively” has been taken to mean “set apart” for a purpose. (Marshall v Graham [1907] 2 KB 112, at 124 per Darling J.) On that basis in the current matter I accept that the meaning of Section 17 refers to the setting apart of the land for the purpose of a single dwelling house, including any other use that may be associated with the enjoyment of the land for that purpose, and does not require the whole of the land to be covered by the actual dwelling.
If I then consider whether the use of the subject land could be construed as a “rural resident site”, I note that what is important is to define what a prudent purchaser in the market place might assess the land for valuation purposes. The matter of market value was assessed Spencer v The Commonwealth of Australia (1907) 5 CLR 418, where Isaac J (later CJ) said at page 441:
“To arrive at the value of the land at that date, we have, as I conceive,
… to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and the purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for whatever reason soever in the amount which one would otherwise be willing to fix as to the value of the property.”
Isaac J went on to note that the value to be determined was to be “the most advantageous purpose for which the land was adapted”. In the current matter the question must be asked whether a prudent purchaser would see the subject land as a “farming” exercise under the Act, or as a rural resident site. Without the benefit of an economic appraisal of the subject land as to whether it would meet the criteria of Section 17 for “farming” purposes, as it then was, the logical conclusion would be to accept it as a rural home site. I note that it is not inconsistent with its permitted use under Rural A zoning of the Town Plan, and I determine accordingly.
Relativity -.
On the matter of relativity I accept that a reduction of $2,000 has been provided to the subject land, and I find no compelling reason on the evidence to upset that unimproved value compared to the adjoining parcels.
Comparison of sales -
I turn then to the sales adopted by Mr Ridley and note the following comparisons:
| Sale | Area | Applied Value | Comparison |
| 1 | 4.213 hectares | $58,000 | Superior |
| 2 | 4043 m2 | $29,000 | Inferior |
| 3 | 1.058 hectares | $30,500 | Inferior |
| 4 | 8073 m2 | $38,000 | Inferior |
| subject land | 4.054 hectares | $56,000 | - |
In seeking comparisons with Mr Ridley’s sales on a per hectare basis, I note that sales of rural home sites are determined on a site basis and not on a pro rata basis. I note also that the use of “averaging of sales” has been rejected by the courts as a method for determining values. That was found in Daandine Pastoral Company Pty Ltd v Commissioner of Land Tax (1943) 7 The Valuer 299, at 305 where Williams J said in the High Court:
“This method of averaging is to my mind unsound. The prices obtained of comparable sales should not be aggregated and averaged, especially when the prices obtained on sales of small areas are dealt with in this way in order to obtain the value per acre of a large area. The only safe course is to compare each sale with the subject land separately. For instance, if three sales considered to be comparable of £3, £2/10/- and £2 per acre are averaged, the average value would be £2/10/- per acre. But if the subject land was closer in value to the land sold at £2 per acre than to the other lands, the average value would cause the subject land to be seriously over-valued.”
That principle has been upheld by lesser Courts on many occasions subsequent. However, the use of averaging was seen as a useful check by Chamberlain J in Robson and Jarvis v The Minister for Education (SA) (1964) 18 The Valuer 486, where he said at page 490:
“I recognise that the unscientific use of averages is a fruitful source of fallacy, but where there are a number of sales at about the same time of
more or less identical blocks at somewhat different prices, an average may provide a useful check.”
However where sales have varying features such as different areas, location and situation, then I believe the use of averaging in that scenario is likely to lead to an erroneous conclusion. In the end I believe the weight of evidence in respect of the sales and relativities with adjoining parcels suggests that the respondent has not made a serious error of fact, or has applied a wrong principle. In that regard I note that the use of sales of vacant or lightly improved lands has been accepted as the preferred method of assessing the unimproved value of land. That was perhaps best encapsulated by the findings of the Land Appeal Court in PH Clough v The Valuer General (1981-82) 8 QLCR 70 where the Land Appeal Court said at page 76:
“It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value. The reason is obvious. In applying such sales there is no room for error in analyzing the value of improvements.”
While Mr Shaw’s estimate of the unimproved value at $42,000 is not in conflict with Mr Ridley’s stated comparisons that the value lies between $58,000 and
$38,000, Mr Shaw’s method of assessing that value has adopted a flawed approach. The heart of this matter therefore falls to the responsibility of the appellant to demonstrate some error in the respondent’s approach to the valuation. On the evidence that has not been demonstrated.
If I look then to Section 33 of the Act I note that it states:
“33. 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.”
Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value of Lot 4 on RP 136558 as determined by the Chief Executive in the sum of $56,000 is affirmed.
MEMBER OF THE LAND COURT
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