Simonidis v Chief Executive, Department of Natural Resources

[1999] QLC 99

[1999] QLC 99

 

LAND COURT,

BRISBANE

24 September 1999

Re:     Determination of Unimproved Value –

City of Brisbane – Division of Coorparoo.
  (Ref. AV98-902).

Helen Simonidis

v.

Chief Executive, Department of Natural Resources

D E C I S I O N

This appeal is against the determination by the respondent Chief Executive of an unimproved value of $380,000 for a Residential “A” zoned parcel of land situated at 10 Welwyn Crescent, Coorparoo.  The parcel is described as Lot 78 on RP 43565 and Lot 2 on RP 115010, Parish of Bulimba, and contains an area of 1356m².  The relevant date for the determination of the unimproved value is 1 October 1997 and the appellant contends within the notice of appeal for an unimproved value of $280,000 which is the valuation applied for the 1 October 1996 relevant date valuation.

The appeal was conducted by Dr John George Simonidis who is the husband of the appellant.  There are two principal thrusts in the appellant’s case.  The first is that Dr Simonidis, having been informed that the sale of the adjoining vacant property (8 Welwyn Crescent) was to be used by the Chief Executive as a basis for valuing his wife’s land, suggests that the price paid for 8 Welwyn Crescent ($380,000) was excessive due to its scarcity value, being the only vacant site in the area with panoramic City views.  8 Welwyn Crescent has an area of 713m².  By way of comparison, he pointed to his wife’s purchase of the subject property just six months earlier for $680,000 with its larger area (1356m²) and with a large attractive and well-maintained house and gardens upon it.  Both properties were sold by the same vendor, and Dr Simonidis says the price paid for 8 Welwyn Crescent is completely inconsistent with the sale price of the subject property.  Dr Simonidis told us that he was offered 8 Welwyn Crescent earlier for a price in the low $200,000’s. 
           The second thrust to the appeal concerns a traffic problem in Welwyn Crescent.  Dr Simonidis tendered copies of letters and reports of meetings expressing concern that of recent times, traffic volumes have increased to about 3,000 vehicles per day through the area.  This increase in traffic volume is apparently related in part to the prohibition on right-hand turns from Chatsworth Road to Upper Cornwall Street.  The Court has been informed in other cases heard at the same sittings that the prohibition is a relatively recent event – certainly after the relevant date for valuation in this case (1 October 1997).  It is no doubt a disability which should be considered in the post-1997 relevant date valuations in the area.
           Mrs Simonidis made reference within her grounds of appeal to valuations placed upon a number of sites in Buena Vista Avenue and Otway Street, Coorparoo, but Dr Simonidis did not make reference to this ground during the presentation of his evidence.
           The respondent Chief Executive called in evidence Allyn Charles Horne who is a Registered Valuer in the employ of the State Valuation Service.  Mr Horne values the subject land at $425,000.  He describes the nature of it as ranging from 1 to 2 metres above street level at its frontage, and then with a further rise to the front of the house pad.  The land generally is fairly level for its remaining area.  Some earthworks may have been completed for the house pad.  Mr Horne relies upon the following sales evidence as a basis for his valuation:-

Sale No 1 – Lot 1 on RP 115010 – 713m² - HJ Lee & Sons Pty Ltd to Helen Coles on 07.07.97 for $380,000 – analysed unimproved value $377,000 – applied unimproved value $340,000 – situation 8 Welwyn Crescent, Coorparoo – zoning Residential “A”.

Mr Horne says this sale land is inferior to the subject land as it is smaller in area.  He says the sale land has similar views of the City and mountains as does the subject land.

Sale No 2 – Lot 391 on RP 41729 – 693m² - McEniery to Gleeson on 25.11.96 for $230,000 – analysed unimproved value $228,000 – applied unimproved value $205,000 – situation 71 Solar Street, Coorparoo – zoning Residential “A”.

Mr Horne comments that the sale land is inferior to the subject land as it has far inferior views, and is much smaller in area.  The sale site has limited views towards the CBD and has views down the street to Mt Cootha, whereas Mr Horne says the subject land has extensive City and mountain views.
           Mr Horne stressed in evidence that his Sale No. 1 land has similar traffic problems to the subject property, and any influence on land values in Welwyn Crescent the problem has should be reflected in the price paid for 8 Welwyn Crescent since it adjoins the subject land.  With this contention I agree, especially since 8 Welwyn Crescent sold on 7 July 1997, just prior to the relevant date of valuation in this case.
           Mr Horne has made enquiries of his Sale 1 land to find out the circumstances surrounding the sale.  The real estate agent handling it listed the property at $400,000 and Ms Coles made an offer of $380,000 and the offer was accepted.  Ms Coles informed Mr Horne that since that time she has had numerous offers to buy the land for in excess of $380,000.  She had a firm offer of $500,000 which she did not accept because she indicated she was going to build a home on the land in the next 12-18 months.
           Mr Horne does not feel that Sale No 1 reflects a scarcity value since it is one of the very few vacant sites in the area.  He says it is open for a purchaser to purchase a property and remove the house to rebuild on the land.  This, he says, has occurred in many places in the surrounding suburbs.
           With respect to the Sale 1 land being offered to Dr Simonidis for a price in the low $200,000’s range, this does not constitute evidence of value.  Only concluded contracts of sales constitute reliable valuation evidence and such evidence is to be preferred to offers on land.  Further, the purchase of the subject property at a price of $680,000 is not sound evidence when the task at hand is to determine unimproved value.  There is the large dwelling house erected upon it and if the sale is to be used as valuation evidence, then a valuation has to be placed upon the house and garden to calculate the unimproved value component in the price paid.  No such evidence was produced by Dr Simonidis.  But in any event if it had been, there is authority for the proposition that the best evidence of value when the task at hand is to determine unimproved value is the sales of vacant or lightly improved properties - Vide Appeal by landholder against determination of Valuer-General (The Fischer case) - (1983) 9 QLCR 44, p.46 where the Land Appeal Court had this to say:-

“It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels.  ”

Mr Horne’s sales evidence falls within this category, and I can find no basis upon which I could conclude that Mr Horne’s valuation of the subject land is in error, or is excessive or unreasonable. 

But before proceeding to my formal determination I should indicate that Mr Horne told us that when the Department was considering the objection filed against the valuation of the subject land, he and the objection delegate (a Mr Gaven Dunn who is a valuer in the Caboolture Office of the Department) decided that the objection should be disallowed and that the value objected against ($425,000) was to remain the valuation for the subject land. But Mr Horne says that the decision went to the regulator who is in the Department of Natural Resources, and then a decision was made by the Chief Executive to reduce the valuation by 10% to $380,000. Now Mr Horne cannot say what the circumstances were behind that decision, but certainly the delegate for the objection conference disallowed the objection and then it was reduced by the Chief Executive’s decision. Not one witness was called in evidence on behalf of the respondent Chief Executive to explain the reason for the 10% reduction. But this Court has the responsibility to determine the unimproved value of the land correctly as it appreciates the evidence, and section 66 of the Valuation of Land Act 1944 provides that the Court may affirm the valuation appealed against, or reduce or increase the amount of that valuation to the extent necessary in its opinion to determine the same correctly. This is an unfortunate outcome for the appellant, but in the absence of evidence which satisfies me that the valuation of $425,000 is excessive, I have no alternative but to determine the value in that sum.

I should add there is judicial authority for the proposition that it is within the Court’s power to increase unimproved values determined by the Chief Executive under the provisions of the Valuation of Land Act. It is to be found in the judgment of the Land Appeal Court in re: Appeal by TKW Muir against determination of Valuer-General – City of Brisbane – (1977) 4 QLCR 81, p84 – where that Court said:

“ We have given considered and serious thought to the powers of this Court on the hearing of an appeal pursuant to the Valuation of Land Act. We are of the opinion that the provisions of section 21(7)(b) in that it refers to ‘the amount’ of a valuation, are sufficiently wide to require this Court to reduce or increase the amount of any valuation made by the Valuer-General and under appeal to the extent necessary to determine the same correctly under, subject to and in accordance with the Valuation of Land Act. ”

I might also add that the provisions of section 21(7)(b) of the now repealed Valuation of Land Act are the same as those contained in section 66 of the current Act.
           For the foregoing reasons, the appeal is dismissed, the Chief Executive’s valuation is set aside, and the unimproved value of Lot 78 on Registered Plan 42565 and Lot 2 on Registered Plan 115010, Parish of Bulimba, is determined in the sum of Four hundred and twenty-five thousand dollars ($425,000).

(CH Carter)
Member of the Land Court