Silman & Bollen v Chief Executive, Department of Lands

[1996] QLC 149

[1996] QLC 149

 

  LAND COURT

BRISBANE

6 November 1996

In the matter of an appeal against a valuation
  Valuation Roll No:  4479
  Local Government:  Redland
  (AV95-376)

Jack F B Silman and Christina E Bollen
  v.
  Chief Executive, Department of Lands

D E C I S I O N

Jack Forrest Banning Silman and Christina E Bollen are the co-owners of land described as Lot 314 on Registered Plan 31213, Parish of Russell, County of Stanley, containing an area of 2,615 square metres.  Under the provisions of the Valuation of Land Act 1944, the respondent determined the unimproved value of the land as at 1 January 1995, at $100,000. An objection by the owners against that valuation was disallowed and they have appealed to the Land Court against that decision, contending in their notice of appeal that the valuation of the land should be $55,000.
           The land is situated at 109 Beelong Street, Macleay Island.  Beelong Street is a formed earth road, sealed in parts with bitumen, although it is not sealed outside the subject land.  There is no kerb or channelling.  The land is developed with a single residential dwelling.
           Mr JFB Silman appeared and gave evidence on behalf of the appellants, while evidence for the respondent was given by Mr GJT Dudek, who is a valuer registered with the Valuers' Registration Board of Queensland and an Associate of the Australian Institute of Valuers and Land Economists.  Mr Dudek is employed as a valuer by the Department of Natural Resources (which includes the former Department of Lands).
           Mr Dudek described the land as a fan-shaped allotment of medium elevation with a moderate to steep crossfall to the east.  The land has a wide frontage to Moreton Bay with approximately 180-degree views to the bay.  There are some mangroves on the foreshore in the vicinity of the land but small water craft access is available along the eastern boundary of the land, that is the bay frontage.
           At the hearing, Mr Silman developed two main arguments in support of the appeal.  He objected to the Department of Natural Resources' practices of:

(a)Putting on public display the annual valuation and restricting any objection to 28 days from the first day of public display; and

(b)Determining the valuation of an improved lot directly on the sale price of unimproved lots.

Mr Silman argued that the public display of annual valuations was an archaic and haphazard method of informing landholders of the annual valuations of their land.  Because he was unaware of the system and the time limits imposed by the system, Mr Silman lodged two objections to the 1994 valuation of his land, both of which were out of time.  He did, however, lodge an objection within time to the valuation as at 1 January 1995, and as noted above that objection was disallowed.
           Mr Silman therefore requested that the objection lodged in March 1995 be back-dated to cover not only the 1995 valuation but also the 1994 valuation. 
This Court has no power to investigate the 1994 valuation in these circumstances. The appeal which was lodged by the appellants concerned the valuation of the land as at 1 January 1995. The notice of appeal filed by the appellants referred only to that valuation. If the appellants had wished to challenge the refusal by the Chief Executive to extend the time for receiving the objections lodged out of time by the appellants in respect of the valuation as at 1 January 1994, the appellants should have taken any appropriate steps at that time. The effect of s.45 of the Valuation of Land Act 1944 is that an appeal only lies to the Land Court where an owner has objected pursuant to s.42 of the Act and where the owner is dissatisfied with the decision of the Chief Executive upon the objection. Because the appellants' notice of objection was late, the Chief Executive has not considered the objection relating to the valuation as at 1 January 1994 and therefore no appeal lies to the Land Court in respect of that valuation.
           The second argument relied on by the appellants is that the Department's practice of determining the valuation for rating purposes of an improved lot by comparison with the sale of unimproved lots is discriminatory, simplistic and in error.
           In arguing that the valuation of the appellants' property was discriminatory, Mr Silman said that because the benefits provided by the Redland Shire Council and paid for out of the general rates are shared equally by all the owners of lots on the island, the increases in annual valuation should also be shared equally by the property owners.  However, he said, the increase in the appellants' valuation was significantly larger than many lots on the island.
           The appeal cannot succeed on this ground. 

"Revaluation of a Shire is not a matter of applying a more or less uniform increase to various types of land when comparing component parcels. What has to be determined is the unimproved value of each parcel of land within the Shire at the relevant date, and the best method or basis for making such determinations is the use of analysed sales evidence. There may be many reasons for a change in the relativity of unimproved values upon revaluation of a Shire ..." (Henricks v. Valuer-General (1981-82) 8 QLCR 176 at 178). (Although an appeal to the Full Court of the Supreme Court was heard in this case, this principle was not challenged in that Court's decision).

Mr Silman argued that the valuation was simplistic because of the lack of services to his property.  This is compounded by the fact that the valuation has increased 250% since he purchased the property in 1989 and there has been no concomitant increase in the services to his property.
           Again, the appeal cannot succeed on this ground.  As stated above, what has to be determined is the unimproved value of each parcel of land, in this case the appellants' land.  The best method or basis for doing that is to use relevant analysed sales evidence.
           Finally, Mr Silman argued that the valuation was wrong.  The buildings on the subject property are insured for $297,900 and the contents for $78,000.  If the value of the land at $100,000 is correct, said Mr Silman, the consequence would be that the total value of his property is $475,000.  In his view that price could not be obtained on the sale of the property.  A realistic price for the sale of the appellants' property, with improvements, is $300,000.
           This ground of appeal also fails.  Pursuant to the Valuation of Land Act 1944, the Chief Executive must decide "the unimproved value of the land" (s.13). S.3(1)(b) of the Act provides that the ' "unimproved value" of land means - 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 the Act, the improvements did not exist.' In Toohey's Limited v. The Valuer-General [1925] AC 439 at p. 443, the Privy Council said:

"Now, what [the valuer] has to consider is what the land would fetch as at the date of the valuation if the improvements made had not been made.  Words could scarcely be clearer to show that the improvements were to be left entirely out of view.  They are to be taken, not only as non-existent, but as if they never had existed.  It is, therefore, to approach the question from a completely wrong point of view to begin with a valuation which takes in the improvements and then proceed by means of subtraction of a sum arrived at by the independent valuation in order to find the required figure.  What the Act requires is really quite simple.  Here is a plot of land; assume that there is nothing on it in the way of improvement; what would it fetch in the market?  It will be observed that the value is not what has been sometimes designated by the expression 'prairie value'.  The land must be taken as it exists at the date of the valuation.  "

Mr Silman submitted that a more equitable method of valuing the land would be to take the unimproved value of the property at the time it was purchased by the appellants (that is $40,000 in 1989) and to add a yearly increase in valuation based solely on the rate of inflation.  This is not a method of valuation which the Court can accept or apply.  The authorities are clear, that the best method of determining the unimproved value of the land as at the relevant date is by comparison with sales of comparable blocks of unimproved land.
           Mr Silman did not attempt to challenge the sales evidence relied on by the respondent in support of the valuation.  Four sales were detailed in the report of Mr Dudek. 
           Sale 1 is a rectangular-shaped vacant allotment of 2008 square metres.  The property is of low elevation and is situated in Coondooroopa Drive, Macleay Island, which is a formed earth road, sealed in parts with bitumen (grass apron and no kerb and channelling).  The property sold for $58,000 on 3 August 1994, it has an analysed unimproved value of $53,000 and an applied value of $45,500.  Mr Dudek commented that the sale property is vastly inferior to the subject property in regard to elevation, views and area but most significantly because of its "Drainage Problem" zoning, which represents a serious impediment to any possible development.
           Sale 2 is of a rectangular-shaped vacant allotment of 1487 square metres.  This property is of medium elevation and is also located in Coondooroopa Drive.  The property was sold on 25 November 1994 for $72,500, it has an analysed unimproved value of $71,500 and an applied value of $71,000.  Mr Dudek regarded the sale property as being inferior to the subject in regard to elevation, views and area.
           Sale 3 is a rectangular-shaped allotment of medium elevation, with an area of 1396 square metres.  It is located at Beelong Street.  The property sold on 20 June 1993 for $80,000.  It has an analysed unimproved value of $79,000 and an applied value of $75,000.  Mr Dudek considered the sale property to be similar to the subject property with respect to the topography, but to be inferior with respect to views (the shape of the subject land ensures that the existing views are of a permanent nature) and area.  Although it is a slightly dated sale, the unimproved value derived from the sale has been applied for both the 1994 and 1995 valuations.
           Sale 4 is a rectangular-shaped allotment of medium elevation with an area of 1131 square metres.  The property is also located in Beelong Street.  It was sold on 27 July 1994 for $95,000.  It has an analysed unimproved value of $75,000 and an applied value of $58,000 (adjusted since to $64,000).  Mr Dudek regards the property as being substantially inferior to the subject property with respect to views and area, although it is located in the same area as the subject property.
           The respondent has determined the value of the subject land as at 1 January 1995 at $100.000.  That valuation is supported by the analysed sales evidence presented to the Court and that evidence has not been challenged by the appellants.  Having regard to the provisions of the Act and the evidence provided by the respondent, the appeal is dismissed and the valuation of the Chief Executive is affirmed.

Member of the Land Court