Sinnott Pty Ltd v Chief Executive, Department of Lands
[1995] QLC 102
•6 September 1995
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BRISBANE
6 SEPTEMBER 1995
In the matter of an appeal against a valuation
Valuation of Land Act 1944
Valuation Roll No.: 1972
Local Government: BCC-South Brisbane (AV93-520)
Sinnott Pty Ltd
v.
Chief Executive, Department of Lands
(Hearing at Brisbane)
D E C I S I O N
Pursuant to the provisions of the Valuation of Land Act 1944, the Chief Executive had valued the subject land at $330,000 and had reduced this to $310,000 following objection by the landholder. The appellant, however, contends for a value of $226,545 (calculating to $165 per m2) and has appealed to this Court accordingly. The value is to be struck as at 31 March 1992.
Mrs Elizabeth Sinnott appeared on behalf of the appellant and gave evidence, whilst Mr Jeffrey Robert Kilgour, registered valuer, gave evidence on behalf of the Chief Executive.
The subject land is located at 79 Ryan Street being on the corner of Ryan and Carlow Streets, West End. Both streets are bitumen sealed with concrete kerbing and channelling. Carlow Street is narrow, rises from Ryan Street until it meets its peak at the same level as Avebury Street to the west, then falls steeply to the river. "No parking" signs are located on the subject land side of Carlow Street. There is a bus stop located on the Ryan Street frontage of the subject land but this does not interfere with the driveway access to the land. Access onto the land via Ryan Street is good. The land comprises an areas of 1373m2 and is located approximately 3 kilometres directly from the Brisbane General Post Office. Services available include town water, electricity, telephone and sewerage. The land has a moderate rise from Ryan Street and becomes level towards the southern boundary. The site ranges from RL 5.5 metres to 9.8 metres Australian Height Datum. It is zoned "Residential B R4" in the town planning scheme for the City of Brisbane effective at the relevant date which, amongst other limitations, limits the permissible Gross Floor Area (GFA) of a building which might be constructed on the subject land to 60% of the area of the land (producing a permissible GFA of 824m2) and the height of a building to three storeys.
The subject land had flooded to a level of about 2.5 metres on its Ryan Street frontage during the 1974 Brisbane River floods and the Brisbane City Council estimate is that if a similar flood was to occur at the relevant date, inundation would be to a level of 0.2 metres only at the Ryan Street frontage. Mrs Sinnott was sceptical of this estimate, however, did not provide cogent evidence to challenge it. Following the invitation of both parties, I inspected the subject land and all of the basic properties referred to by the parties during the hearing. My inspection assisted me in understanding the evidence adduced.
The subject land is separated from the Brisbane River by 10 Carlow Street which is a three storey building with a pitched roof. This building cuts views directly to the river, however, an aspect towards the river is available down Carlow Street at the bottom of which a large tree is located. Mr Kilgour was of the view that a three storey development on the subject would afford a view from perhaps one unit towards the river, but that in any event the prospect of such a view being acquired did not feature significantly in his valuation. The appellant did not agree that such a view would be available and said that if a building were constructed in such a way as to take advantage of this aspect, the view would be severely limited by the presence of the large tree referred to above. I have concluded that a view towards the river from a unit in a possible development on the subject land would be available, albeit a view filtered by a large tree. This is not, however, dissimilar from views of the river available from other blocks in the vicinity of the subject land. I might also add that whilst in other instances views could be built out, any view available from the subject land down Carlow Street would be available on a permanent basis.
During the course of the hearing the appellant referred to the percentage increase in valuations applied by the Chief Executive in respect of the subject land and other basic properties from year to year. Whilst some general appreciation might be gained from referring to such percentage changes, I will not rely on this evidence directly in this case as there are suitable bases available which provide a direct comparison and direct evidence of such a nature is much more suitable than general impressions. This is consistent with what the Land Appeal Court said in Tow v. The Valuer-General (1978) 5 QLCR 378 at 381:"It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation."
Evidence tendered by Mrs Sinnott by way of an article from "The Courier-Mail" dated 7 April 1995 regarding Central Business District values, is of no assistance to me in considering the grounds of the appeal lodged. I also set aside the evidence of a letter from real estate agents proffering a view, dated 28 July 1995, of the value of the subject land. This letter offered no basis for the view expressed, and included a statement which attempted to exclude responsibility for the opinion stated. The author of this letter was not presented for cross-examination.
Another matter that I should dispose of before dealing with the basic valuation evidence is concerned with various statements Mrs Sinnott made to the effect that current developments on land and the presence of saleable buildings on sites ought to feature in some way in assessing unimproved value. Certainly I agree that in analysing sales to be relied upon as bases of valuation for unimproved value purposes, these matters are relevant, however, for the purpose of the Valuation of Land Act I must view the subject land (and presume values placed on other lands by the Chief Executive) in accord with the provisions of s.3(1)(b) of the Valuation of Land Act. Section 3(1)(b) provides:
"`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."
As I have mentioned above, the zoning of the subject land limits the permissible gross floor area (GFA) of a building to 60% of the site area and the height of a building to three storeys. It appears from the evidence that other factors such as site coverage feature in the calculation of GFA and that in all cases the permissible limit may not be achieved. The significance of this matter is that in the comparison made by Mrs Sinnott between the subject land and her basic properties, all comparisons were made on a dollar per square metre basis (although a dollar per home unit was mentioned on one occasion), whilst Mr Kilgour preferred to use the price per square metre GFA as being the better indicator of the price that a developer would pay. I accept Mr Kilgour's approach as he is an expert in such matters, however, I do not totally disregard Mrs Sinnott's approach on this basis as it may be that the GFA possible on the blocks referred to by her might be arrived at by the simple application of a 60% of the total area calculation.
There is a group of properties located in Orleigh Street to which Mrs Sinnott referred, and in respect of these she provided the value applied by the Chief Executive to each of these properties as at the same relevant date as applies to the subject. This group of properties is:
Property Area Value Approximate
Value per m2
15 Orleigh Street 948m2 $275,000 $290
17-21 Orleigh Street 1692m2 $345,000 $203
51 Orleigh Street 1194m2 $285,000 $238
65 Orleigh Street 946m2 $240,000 $253
69 Orleigh Street 1518m2 $445,000 $293
27 Ryan Street 809m2 $165,000 $203
Each of these properties, apart from 27 Ryan Street, has an aspect over Orleigh Street to the park on the other side which runs along the Brisbane River. 27 Ryan Street shares part of this view, however, is separated from Orleigh Street by the blocks which are located on that road. Mrs Sinnott put the view that the subject land is inferior to each of these blocks of land and, apart from what I say below, this submission would appear to have merit. My first qualification to this conclusion is to note that 15 Orleigh Street is located near the ferry and buses which generate noise, fumes and a visual pollution which is unattractive to this block yet, peculiarly, it has a substantially higher dollar per sq. metre value applied to it than does 65 Orleigh Street which is a similar size. It may be that the valuer who supplied these values was of the view that the ferry and buses provided an advantage to 15 Orleigh Street, however, if this were the case why would it be that 69 Orleigh Street has a higher dollar value per sq. metre again than does 15 Orleigh Street? I note also that 69 Orleigh Street has a substantially higher area than 15 Orleigh Street (a feature which would often result in a dilution of value), whereas 51 Orleigh Street, which is smaller in area than 17-21 Orleigh Street, has a higher value per unit area. 27 Ryan Street, on the other hand, does not have the same quality outlook as the properties situated on Orleigh Street, but has a similar value per sq. metre to 17-21 Orleigh Street, a property about twice its size. The explanation concerning what I observe as discrepancies in these applied values may lie in the consideration of other factors, such as earthworks, however, I have no evidence of this and am not inclined to proceed on the basis of assumptions.
In the absence of expert evidence pointing to the manner in which this list of properties was valued and how they ought to be compared with the subject, I am left with the general impression only that the properties away from the ferry and buses (apart from 27 Ryan Street) are superior to the subject, but have no direction on how that ought to feature in the value to be applied to the subject.
Mrs Sinnott also referred to a property at 33 Hoogley Street which is an inside lot of 607m2, valued at $222.20 per m2, which may be subject to flooding, is located on a somewhat busier street than the subject, has limited views from the top floor units and suffers some of the advantages and disadvantages of being close to the ferry terminal and bus stop. As Mr Kilgour provided evidence that the minimum site area under which home units could be developed under the Town Plan in effect at the date of valuation was 800m2, reliance on this property without further evidence on how its valuation was struck, would be unsafe.
Mrs Sinnott sought to rely on a sale of the land located in 17-21 Orleigh Street on 24 June 1995. The sale land has a heritage style old Queenslander fit for sale or removal, however, the sale was not analysed. In any event, the sale date is so far removed from the relevant date which applies to the subject valuation that this transaction is of no use to me. It may have indicated, however, that the value of $345,000 placed on this property by the Chief Executive was based on the use of the land as single-unit residential purposes. I have, however, no conclusive evidence on this.
Mrs Sinnott referred to the Chief Executive's valuation of a property located at 83 Ryan Street, however, Mr Kilgour advised the Court that, whilst it was his view that this land ought to be valued for multi-unit residential purposes, the land had been valued as if it were a single-unit residence. This being the case, this property is not a suitable basis. Another basis referred to by Mrs Sinnott located at 19 Whynot Street is unsuitable because there is unreliable evidence as to what the area of the land is. The appellant also referred to an auction conducted on 12 April 1995 of a property located at 22-26 Dornoch Terrace, having two removable Queenslanders on the land. This auction was unsuccessful with the land being passed in at $475,000. Given the date of the auction, its unsuccessful conclusion and the fact that I was not presented with an analysis of any nature, I cannot rely on this evidence.
Mrs Sinnott says that the most applicable basis is a property located at 119 Ryan Street, having an area of 873m2 and an applied value by the Chief Executive of $400.90 per m2. I am not, however, presented with suitable evidence as to how a comparison between the subject land and this basis would produce a value of $165 per m2 on the subject. It seems to me that the figures are so far apart as to make a comparison tenuous.
I am left now with three bases referred to by Mrs Sinnott. The first of these is located at 7 Avebury Street, comprises 1290m2, has river frontage and has an applied value of $267.40 per m2 or $520 per m2 GFA. Both Mr Kilgour and Mrs Sinnott agree that this property would be superior to the subject. 10 Carlow Street abuts the subject on its river side and separates the subject from the river. It has an area of 2620m2 and was valued by the Chief Executive at $270.90 per m2 or $420 per m2 GFA. Both parties agree that this land is superior to the subject. Mrs Sinnott also compared the subject to 85 Ryan Street which has an area of 1153m2 and an applied value of $251.50 per m2. This is an inside lot with some views of the river and was seen by Mrs Sinnott to be superior to the subject.
Mr Kilgour referred to two properties, each of which were sales. The first of these was located on Montague Road, West End, comprising an area of 794m2, analysed by him to a value of $300 per m2 GFA. In comparison with this block (and the other sale referred to below), Mr Kilgour applied $375 per m2 GFA to the subject. He said that the subject, being a larger block of land with two-street frontage, was superior to the basis, particularly given that the basis was located on a major West End roadway. Mrs Sinnott, on the other hand, viewed this sale as being superior to the subject, given that it was her understanding that the basis had not flooded in 1974, had a bus stop across the road which was wider than Ryan Street and had superior topography to the subject. Mr Kilgour did not agree on the point of topography and the evidence showed that Mrs Sinnott had thought the land to be flatter than a contour map indicated. It seems to me that this basic property could be seen as superior to the subject only by overstating its attributes or the disabilities of the subject, or in understating the advantages that the subject has.
Mr Kilgour also referred to a sale at 19 Dudley Street, Highgate Hill, comprising an area of 2286m2, analysed to an applied value of $450 per m2 GFA. He saw this sale as being superior to the subject, in particular because the basis has river frontage.
Whilst Mrs Sinnott provided a large amount of basic evidence, it is the evidence of comparable sales provided by Mr Kilgour which provides the best guidance to me. This is not only because I have the benefit in the sales evidence and an expert comparison provided by a registered valuer, but because sales evidence is intrinsically more suitable in matters such as that before me. This view was expressed in Fischer v. The Valuer-General (1983) 9 QLCR 44 at 46 where the Land Appeal Court said:
"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. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence."
Whilst I conclude that the subject land is superior to Mr Kilgour's Sale 1 located in Montague Road and inferior to his Sale 2, it seems to me that he has not made sufficient allowance for the cramped access situation near the subject land and the unavailability of street parking in the immediate vicinity of the subject. In making some further allowance for these factors, I would determine the value of the subject land at $300,000. The appeal is therefore allowed, the valuation of the Chief Executive is set aside and the value is determined accordingly.
RP SCOTT
MEMBER OF THE LAND COURT
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