Skuthorpe v Department of Natural Resources and Mines
[2005] QLC 26
•27 May 2005
LAND COURT OF QUEENSLAND
CITATION: Skuthorpe v Department of Natural Resources and Mines [2005] QLC 0026 PARTIES: Arthur Norman Skuthorpe
(applicant)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO.: AV2004/0109 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under Valuation of Land Act 1944 DELIVERED ON: 27 May 2005 DELIVERED AT: Brisbane HEARD AT: Coolangatta MEMBER Dr NG Divett ORDER: The appeal is dismissed, and the unimproved value of Lot 155 on RP 93664 as determined by the Chief Executive in the sum of Three Hundred and Fifteen Thousand Dollars ($315,000) is affirmed. CATCHWORDS: Words and phrases – potential of the land – unimproved value – highest and best use – potential use – Valuation of Land Act 1944, s.3(1)
Valuation – comparison of sales – use of sales – whether bound to particular sales – other subsequent evidence permissible
Valuation – sales evidence – unacceptable sale – offers not applicable – weight to be applied.APPEARANCES: Mr AN Skuthorpe appeared on his own behalf
Mr A Cradick, Principal Legal Officer for the respondent
Background:
This matter relates to land at 26 Pall Mall Avenue, Currumbin, and described as Lot 155 on RP 93664, Parish of Tallebudgera. The subject land has an area of 577 square metres, and is located at the end of Pall Mall Avenue, which is a cul-de-sac, and is about 16 km. south of the Surfers Paradise Mail Exchange, and about 2 km by road from the nearest surfing beach. The subject land is zoned Residential Dwelling House under the town plan of the Gold Coast City Council of 24 February 1994, effective at the date of valuation of 1 October 2002. The key issues are the method of valuation, the impact of views, relativity and comparison of sales.
On 24 February 2003 the Chief Executive issued a valuation of the subject land at $315,000. Following an objection the Chief Executive confirmed that figure on 8 July 2003. The owner has now appealed that figure, claiming the unimproved value should more properly be $120,000.
Arthur Norman Skuthorpe, a retired businessman with experience in the construction industry, appeared and gave evidence on his own behalf. Mr A Cradick, Principal Legal Officer appeared for the respondent, calling evidence from Scott William Taylor, the departmental registered valuer now accepting responsibility for the valuation, which was previously undertaken by a senior valuer, who is no longer available to defend the valuation. Mr Taylor confirms that his valuation of $315,000 represents his own personal professional opinion of the relevant unimproved value of the subject land.
History of the appeal -
The issues in the current matter follow a similar pattern to those pursued in two previous appeals. Those decisions were delivered on 28 June 1996 (AV95-319), and 24 March 2004 (AV2002/085), both of which explored in some detail the particular features of the subject land. While there is general agreement about the issues explored in those matters, Mr Skuthorpe argues that in both of those previous decisions, the Court has incorrectly accepted evidence which was based upon incorrect interpretations of the Valuation of Land Act 1944 (the Act). Mr Skuthorpe now seeks to clarify how the Act is being misunderstood.
Mr Skuthorpe advises that he purchased the subject land for $67,000 on 2 January 1987, during a short visit to the Gold Coast for a period of three days from the southern States. He notes that the subject land had been on the market for two years prior to his purchase, which he argues demonstrates the inherent difficult nature of the land. Mr Skuthorpe advises that the subject land has a narrow frontage, and falls steeply to the rear, and contains several large outcrops of volcanic rocks. Those matters are not disputed. Mr Skuthorpe advises further that the main reason he purchased the land was because of its location near personal friends further to the north along the western side of Pall Mall Avenue, near Lot 133.
Mr Skuthorpe also advises that as a result of the Court Notice in this current appeal, he had discussions with Mr Taylor who sought permission to visit the subject land for further examination. During those discussions he argues that Mr Taylor had indicated that comparisons had been made between the subject land and two other sales of parcels at 27 Thrower Drive and 14 Mount Street, Burleigh Heads. However Mr Skuthorpe notes that the sale at 27 Thrower Drive has now been abandoned, and he questions the reliability of the respondent's valuation, which he understands had previously considered the sale at 27 Thrower Drive.
In response to that query, Mr Taylor advises that further investigations of the sale at 27 Thrower Drive had revealed that sale to have been a multi-unit site, which he advises has no direct relevance to the single unit residential site market. Mr Taylor notes that 27 Thrower Drive has multi-units all around it, and is clearly a multi-unit development site. Mr Taylor advises that he had valued the subject land under s.17 as a single unit residential site, and his comparisons were therefore based upon like with like comparable lots.
The nature of the land –
Mr Skuthorpe firstly challenges that the subject land is located in the prestige area known locally as Currumbin Hill. He argues that the locality of the subject land contains mostly rental properties, and the difficult nature of parking in Pall Mall Avenue has a significant impact upon the physical attractiveness of properties in that street. He argues that drawing comparisons with sales in other more upmarket locations such as the true Currumbin Hill near Woodgee Street to the east of the Pacific Highway, and also at Burleigh, provide unfair comparisons with the subject land.
In respect of the topography of the subject land, Mr Taylor provides topographic mapping of that locality, and also of the respective sales that he has applied in his valuation (Exhibit 4). It is agreed that in respect of slopes upon each parcel, the subject land falls from the street to the rear by about 10 to 12 metres, while each of the four sales falls about 15 metres.
The key issue in this matter is again Mr Skuthorpe's understanding of s.3(1) of the Act, and the direction in that section that physical improvements upon the land must be taken to have not existed. Mr Skuthorpe argues that if the physical improvements are to be excluded when considering the land, then it is clear that from the natural ground level of that parcel, there would be no expansive views available, and the resulting value would be significantly reduced. Mr Skuthorpe argues that it is not correct to interpret s.3(1) to infer that the "potential" to obtain views could be considered. He argues that there is no such direction in the Act.
In respect of any height restrictions upon possible buildings upon the subject land, it is agreed that as a single unit residential site the only restriction is to be found in the Gold Coast Building Code, which limits the development on such sites to 7.5 m. in height. Mr Skuthorpe agrees that he had to obtain permission for building upon the site from the Civil Aviation Authority for air traffic control purposes, as it falls within the flight path from Coolangatta Airport. However he advises that did not limit the height of the dwelling below that which could be approved under the town plan. It is noted that the current building height on the subject land is approximately 72 m. in elevation, and reflects one of the highest positions in that area.
In respect of the nature of the soils and rock outcrops upon the subject land, Mr Taylor advises that he has considered that in his comparisons. He notes that where those soil types and rock are encountered in that area, owners often tend to construct pole houses, which are more suited to those disabilities. He argues that those conditions are also encountered on his comparable sales. Mr Taylor argues that to his knowledge, both the Pall Mall Avenue area and the Woodgee Street area are both known as Currumbin Hill. Mr Taylor also rejects Mr Skuthorpe's understanding of unimproved value of the land, as he notes that when determining such a figure, he must consider the potential of the land when determining its highest and best use for valuation purposes.
The method of valuation –
In explaining his method of seeking the unimproved value of the subject land at $120,000, Mr Skuthorpe has again relied upon the use of a Consumer Price Index (CPI) adjustment. He argues that he has applied a CPI figure of 4.4% to the previous unimproved value to determine his estimate of $120,000. Mr Skuthorpe argues that such a method is much fairer than the approach adopted by the respondent department. Mr Skuthorpe has not applied any sales evidence in his approach. Mr Skuthorpe argues that, in his opinion, by pursuing the current approach of comparing sales of lands which are not entirely similar to the subject land, the respondent is perpetuating a misconception of the Act, rather than seeking to identify the real issues which determine the unimproved value.
Mr Skuthorpe also rejects the current use of a computerised valuation process, which he argues fails to follow the fundamental principle that each parcel should be separately inspected and valued accordingly. He draws support from his conclusion that the current valuation process is causing errors, in the virtual consistency of the separate parcels along Pall Mall Avenue. He notes that those parcels are all dissimilar in nature, yet are all virtually valued at a consistent level along either side of the street. He argues that demonstrates the problem with the current valuation process. Mr Taylor rejects that hypothesis, as he notes that in the market place, as residential parcels are purchased on a site value basis, then minor differences between those parcels would not necessarily result in significantly different values along Pall Mall Avenue. Mr Taylor argues that the relatively consistent unimproved values shown in Exhibit 2, Attachment C appear in correct relativity.
Mr Skuthorpe also suggests that as the Act is now more than 60 years since its introduction in 1944, that it may be out of date in respect of modern valuation needs, and he understands that an amendment to the Act is now being considered. Mr Skuthorpe argues that any new amendments should make the Act more understandable for the average landowner. Mr Skuthorpe was surprised to know that the Act had been amended many times over its lifetime, and some amendments almost occurred on a yearly basis as circumstances demanded.
Relativity –
In determining his valuation, Mr Taylor advises that his first approach had been to look at the relativity of parcels near the subject land. Having found that those relativities appeared consistent, he then sought comparisons with the sales of comparable parcels, in order to gain an idea of changes in the market level in that area.
Mr Skuthorpe disagrees that the relativities with surrounding parcels was consistent. He notes that the unimproved value of the adjoining parcel to the west of the subject land at 24 Pall Mall Avenue (Lot 150), had increased from its previous unimproved value at 1 October 2001 of $230,000, to its present value of $310,000. He argues that is to be compared with the increase in the subject land (Lot 155) from $185,000 to $315,000. However Mr Taylor advises that following the previous court decision of 24 March 2004, the subject land had been increased to $250,000. It is noted that Mr Skuthorpe had relied upon the unimproved value of the subject land at $185,000 in a SmartMap supplied by the Chief Executive (Exhibit 2, Attachment B). However it is noted that SmartMap was produced on 20 February 2003, well before the decision of this Court, and any comparisons on that basis are unreliable.
Mr Skuthorpe also seeks support and relativity with a parcel to the east at 2 Lansell Avenue (Lot 375). He notes that parcel was initially valued by the Chief Executive in 2002 at $450,000, and after objections and discussions with the owner, the land was reduced to $210,000. He notes that parcel has again been revalued at the current relevant date at $285,000. A subsequent SmartMap supplied by Mr Taylor confirms those recent figures. Mr Taylor rejects that the relativities with those parcels had been changed in the current valuation at $315,000.
Comparison of sales –
Mr Skuthorpe provides no sales evidence of his own, but refers to various "offers for sale" at 11 Hooper Drive (house and land) at $393,000 and 11 Miller Drive (house and land) at $375,000. While he cannot confirm whether those improved properties in fact sold at those prices, he argues that, even as improved properties at those offering prices in areas of only 150 m. from the beach, suggests that the subject land is over-valued at $315,000. Mr Skuthorpe also refers to other properties offered for sale at Tugun in the range of $440,000 for beach fronts, to $455,000 in a treed area only minutes from the beach. He argues those areas are far superior to the locality of Pall Mall Avenue. However he provides no specific details of the features of any of those properties still on the market at the relevant date.
Mr Skuthorpe is aware of guidance provided in the High Court of Maurici v Chief Commissioner of State Revenue and Anor [2002] 212 CLR 111. He notes that where there is a scarcity of sales of vacant lands, then it is important to ensure that the sales of truly comparable improved properties are analysed to ensure that any scarcity factor is identified. He argues that because of the particular rocky outcrop problems associated with the volcanic nature of the subject land, the sales analysed by Mr Taylor cannot be classified as truly comparable properties. Mr Taylor rejects that assumption, noting that there was no discernible trend of scarcity in the sales available. However to check that observation, Mr Taylor provides an analysis of improved sales at 48 Woodgee Street (Sale 3) and also 15 Lansell Avenue (Sale 4). He argues those sales support the comparisons with the sales of vacant land.
To support his valuation Mr Taylor provides the following sales evidence:
· Sale 1 – (67 Blamey Drive, Currumbin – Lot 24 on RP 181313). This is a sale of 1,719 square metres of vacant land about 0.7 km. radially south of the subject land. The sale has comparable relationships to the beach, and is an irregular shape parcel falling comparably from the rear to the street. There are good southerly views, although there are no ocean views. Overall the sale is larger, but is seen as inferior due to the superior ocean views of the subject land. The sale sold on 28 February 2003 for $240,000, was analysed at $239,000, and applied as a late sale at $180,000 (75%).
· Sale 2 – (14 Mount Street, Burleigh – Lot 1 on RP 162126). This is a 530 square metre vacant parcel located about 5.1 km. radially north-west of the subject land, in a superior locality. The sale falls steeply to Mount Street, which is a very steep bitumen carriageway with limited on-street parking available. The sale has a comparable building site, and slightly superior views. Overall the sale is seen as superior because of its superior location and slightly superior views. The sale sold in May 2002 for $460,000, was analysed at $459,000, and applied at $415,000 (90%).
· Sale 3 – (48 Woodgee Street, Currumbin – Lot 1 on RP 1979). This is an improved 405 square metre parcel located about 0.7 km. radially north-east of the subject land. The sale is located in a superior locality due to its closer proximity to the beach. The views are seen as inferior, as they are mainly to the south-west towards the Hinterland, with only partial views eastward to the ocean. The sale is improved with a single storey 1960s fibro cement dwelling, with an estimated added value of $30,000, and $10,000 of landscaping. Overall the sale is seen as superior to the subject land due to its superior location and topography. The sale sold in August 2002 for $610,000, was analysed at $570,000, and applied at $540,000 (95%). The sale previously sold in August 2001 for $487,500.
· Sale 4 – (15 Lansell Avenue, Currumbin – Lot 357 on RP 92799). This is an improved 551 square metre sale located about 0.15 km. radially north-east of the subject land. The sale falls steeply to the rear, with excellent easterly ocean views, which are seen as superior views to the subject land. The sale is improved with a two storey weatherboard 1970s dwelling, with an added value of $198,500 for all of the improvements. Overall the sale is seen as superior because of the superior ocean views. Other aspects are similar to the subject land. The sale sold in October 2002 for $650,000, was analysed at $451,500, and applied at $340,000 (75%).
Mr Skuthorpe argues that the respondent has previously relied upon sales purchased by a real estate developer, who purchased nearby land at 59 The Crest, Currumbin (Lot 331), about 0.2 km. south of the subject land. He argues that sale was used in the previous appeal before this Court (AV2002/0851). Mr Skuthorpe argues that it is inappropriate for the respondent to compare sales of investment lands with private owner occupier residential lands. Mr Taylor rejects that conclusion, as he argues that there is really only a single market for residential lands in that area, and investors and developers must compete with owner occupier purchasers. Mr Skuthorpe provides no evidence to support his opinion of a differentiated market in the area.
Mr Skuthorpe also argues that the much larger area of 67 Blamey Drive (1,719 square metres), is about three times the area of the subject land, and is therefore not comparable land. Mr Taylor agrees that sale is much larger, but argues that the much superior ocean views of the subject land to the north balance that larger area, and the subject land is superior because of those views.
In respect of why he rejected the sale at 27 Thrower Drive (see paragraph [7], Mr Taylor argues that it was his duty as a registered valuer to provide the best evidence for the Court, and he has sought to do that in this matter. He argues that he is not bound by any previous inference that 27 Thrower Drive played a major role in his determination of the unimproved value.
In explaining his understanding of the sale properties, Mr Taylor explains that he is very familiar with that locality, as his parents purchased a property in Woodgee Street, Currumbin Hill in 1997. Mr Taylor argues that he has made allowance for the difficulties of building in that rocky area in his valuation. He advises further that while his Sale 3 (48 Woodgee Street) was small at only 405 square metres, he believes that a two-storey dwelling could be built upon that site with some difficulty. Mr Taylor also agrees that parking is difficult in Woodgee Street, but the partial views from that sale are impacted by a tree across Woodgee Street. In his analyses of the existing dwellings on Sales 3 and 4, Mr Taylor had relied upon the general industry standard of Rawlinsons Construction Guide. He also notes that the housing market at the relevant date in October 2002 was experiencing a boom period of sales, within increases of 25% to 38% common across parcels. He also rejects any out of line sales, and he had applied only 75% of the analysed value of Sale 1 in order to retain local relativity in that area.
Decision:
The Legislation –
Before considering the other evidence, I note Mr Skuthorpe's concerns that the Chief Executive is misunderstanding and misinterpreting the wording of the Act. I agree with Mr Skuthorpe that the Act does not refer specifically to any "potential" of the land, when it defines the meaning of unimproved value in s.3(1) of the Act. Nor does the Act refer to the "potential" of the land in s.2, where the general terms specified in the Act are enshrined. However the purpose of the Act sets out how the Act is to be read when it says:
"An Act to make better provision for determining the valuation of land for rating and taxing purposes, and for matters incidental thereto or consequent thereon."
Clearly the reading of s.3(1) is to be taken as guidance as to how the "unimproved value" of the land is to be ascertained. Now that infers that it is the "value" of the land that is being defined, and as noted in paragraph [26] of the earlier decision in AV2002/0851, the meaning of the value of land was clearly established by the High Court in Spencer v The Commonwealth of Australia (1907) 5 CLR 418, per Isaacs J at 441, when he said:
"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 a 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 what reason soever in the amount which one would otherwise be willing to fix as the value of the property."
The key issue in that direction involved two prudent and informed people, seeking to negotiate a price that would satisfy both parties. Both the vendor and purchaser are taken to be fully informed about the features of the land, its character and situation, and how it could be used by either party. Indeed land of its own volition has little intrinsic value unless it can be used for some purpose. It is in understanding that purpose that the potential use of the land comes into play. In the Spencer decision, Isaacs J also noted at 440:
"The facts existing on 1 January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the advantageous purpose for which it was adapted."
Clearly in deciding the best purpose for which the land can be used, involves the process of deciding its highest and best use. Now in deciding the highest and best use of the land, it is not only the land that must be considered, but also any improvements relating to it. That was emphasised in Schiller v Kyemba Shire Council (1933) 3 The Valuer 28. In that matter in the Land and Valuation Court of New South Wales, Pike J found that while the land in Wagga was actually being used for mixed farming and dairying, the highest and best use of part of that land really was for agricultural purposes. What Pike J was saying was that the potential of that land was for a higher purpose than that for which it was being used.
Now in deciding the highest and best use of the subject land, what we must consider is the "potential utility" of the land for that purpose. The potential utility refers to the latent and more beneficial use which may be capable of coming into being, by a person of ordinary prudence and foresight. However the potential utility of the land should not include purely speculative considerations. That was noted by the High Court in The Minister of State for Home Affairs v Rostron & Ors (1914) 18 CLR 634, where Isaacs J, speaking about any possible changes in value as a result of subsequent market fluctuations, said at 636:
"Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded."
Following those precedents, it is clear when determining the unimproved value of the subject land under s.3(1) of the Act, that what we must do is to consider the land as it existed in its natural state, with all of the improvements existing on surrounding properties, and determine the value of the highest and best use of the parcel under the existing planning regime at the relevant date. It is agreed that was for the development of a single residential dwelling, generally capable of maximising any benefits from the existing expansive views of both the hinterland to the west, and to the ocean to the north-west. That was previously found in paragraph [27] of the earlier decision of AV2002/0851.
I turn then to Mr Skuthorpe's concern that in determining the unimproved value of the subject land, Mr Taylor had previously considered the sale at 27 Thrower Drive, but now in his evidence he rejects that sale, and relies instead on four other sales. In that regard I note that Mr Taylor had valued the subject land under s.17 of the Act which directs:
"17.(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made.
Clearly any comparisons with sales of land which have a "potential use" for a higher land classification would not be in accordance with the general valuation principle of comparing "like with like". Mr Taylor was correct in rejecting the sale of 27 Thrower Drive, as it was for a multi-unit purpose, reflecting a different use to the single residential use of the subject land.
Now I also note Mr Taylor's concern that the respondent should not be restricted in his evidence to only those sales contained in the previous without prejudice discussions. In that matter I turn to the decision in Mayne Property Development Pty Ltd v Chief Executive, Department of Lands (AV94-64) 16 February 1996, unreported, where the President said at 7:
"In my opinion there is no merit in the appellant's argument. Whatever the respondent's obligations to provide information under the Freedom of Information Act, this does not prevent him from relying on additional information before this Court. He is not required to advise the appellant of his case in advance. Here there are no pleadings by which a party is bound. On most occasions, neither party will know with any certainty what sales the other will be relying upon until they are produced at the hearing.
The unimproved value of a parcel of land is a matter of fact. A valuer forms an opinion of that value based on the evidence he has available at the time of making the valuation. Other evidence may subsequently come to his attention. If, upon closer investigation, he finds that other sales support his opinion then he is entitled to include them in his evidence or substitute them for his initial evidence."
Now since that date there have been amendments to the Land Court Rules 2000, which now require, under s.23, that expert evidence be exchanged prior to the actual hearing. However that does not preclude the expert from forming his opinions based upon the total evidence as it appears relevant to him at that time. There is also scope, with the leave of the court, to variations under s.23(3). I see no reason why Mr Taylor should be restricted in his sales evidence supplied in this matter.
The method of valuation -
It is agreed that there are no fundamental differences between the parties in respect of the nature, and difficulties of building, upon the subject land. The rocky outcrops, steep slopes and instability of the soils, are also in part evident upon the comparable sales used by Mr Taylor. I accept that building construction would have been difficult and expensive, as outlined in the two previous decisions on this property. However I agree with Mr Taylor that modern building systems such as pole housing design would be viable options for any proposed residential construction. Such problems would also have been contemplated by the prudent purchasers of Mr Taylor's sales.
I turn then to the appropriate method of valuation to be applied in this matter. I note that Mr Skuthorpe has again proposed the use of the Consumer Price Index (CPI) as a means of determining market changes over the relevant period. Such an approach was rejected in the previous decision in AV2002-0851, at paragraph [42], and I will not repeat those reasons.
I note also Mr Skuthorpe's rejection of the current computerised mass appraisal system used by the Chief Executive in determining the unimproved values. Now while Mr Skuthorpe may have genuine reasons for lacking confidence in the existing system, the evidence before both this Court and the Land Appeal Court supports the principle that the mass appraisal system does not offend the directions of the Act. Perhaps, as Mr Skuthorpe speculates, any problems may not be with the system itself, but if they do occur, they are likely to be more associated with inadequate resources to effectively implement the process. However there is no evidence in the current matter to suggest such a scenario.
In making his observations that slightly different parcels along Pall Mall Avenue should not reflect almost identical unimproved values, Mr Skuthorpe sees that as demonstrating the errors in the mass appraisal process. However, as noted previously in paragraph [35] of the last decision in AV2002-0851, the use of a "site" value approach is how the market place values residential lands. The key features of parcels along Pall Mall Avenue are likely to be the elevated nature of the land and the extent of views available, and the amenity of that locality. It would not be surprising to find that in the market place, those comparable features along Pall Mall Avenue might reflect comparable values.
Relativity –
In seeking relativity between parcels in that area, I note that Mr Taylor first considers those relationships before he then sought sales evidence to indicate market growth during the relevant period. I look then at the general relativity between the adjoining parcels:
Parcel Unimproved value at 1 October 2001 Relativity Unimproved value at 1 October 2002 Relativity 24 Pall Mall Avenue (Lot 150) $230,000 0.92 $310,000 0.98 2 Lansell Avenue (Lot 376) $265,000 1.04 $285,000 0.90 15 Lansell Avenue (Lot 357) $245,000 0.98 $340,000 1.08 59 The Crest (Lot 331) $225,000 0.90 $300,000 0.95 Subject land (Lot 155) $250,000 1.00 $315,000 1.00
It is noted in the last decision at paragraph [53] that Mr Crowley was reconsidering his valuation of 2 Lansell Avenue (Lot 376) from $285,000 to $265,000, in order to better allow for the less certain access of that parcel to Pall Mall Avenue. It is also noted from paragraph [21] of that decision, that 13 Lansell Avenue (Lot 356) had an unimproved value of $245,000 and adjoins 15 Lansell Avenue (Lot 357), and has the same area as that parcel. Both Lots 356 and 357 have the same current value of $340,000. On those relativities there is nothing to suggest that Mr Taylor has made any error in his valuations in the current matter. He has apparently made more allowance for the uncertain physical access of Lot 376 to Pall Mall Avenue, and now reflects a greater value for the direct ocean views to the east at 15 Lansell Avenue (Lot 357) and 59 The Crest (Lot 331).
Comparison of sales –
I turn then to the sales applied by Mr Taylor and notes that he rejects any scarcity of comparable sales in that area. However, to provide a check on his vacant sales, Mr Taylor has also analysed two improved sales. In adopting that approach, Mr Taylor argues that Maurici can be distinguished, as in that matter it had been agreed by both parties that a scarcity factor of sales of vacant lands did exist in Hunters Hill in Sydney. In Maurici the High Court noted at paragraph [18]:
"In valuing the land, the respondents valuer, to use the language of the Privy Council in Melwood, 'ignored a principle of assessment of [value]', the principle being, that sales to be treated as comparable sales need to be truly comparable; or, to put it another way, in valuing the land the respondent’s valuer did not proceed rationally, in that he was unreasonably selective in ultimately confining himself to two sales of scarce vacant land for the purposes of the comparison. The respondent could not, and did not suggest that he would be performing his statutory duty if he made other than a fair estimate of the value of the subject land. A fair estimate could only be made here on the basis of a fair, that is to say, a reasonably representative group of comparable sales. A group of comparable sales cannot be representative if it does not go beyond sales of scarce vacant land."
Mr Taylor then provides the following comparisons:
Sale Area Applied Value Comparison 1
(67 Blamey Drive)1,718 square metres $180,000 Inferior 2
(14Mount Street)530 square metres $415,000 Superior
3
(48 Woodgee Street)405 square metres $540,000 Superior 4
(15 Lansell Avenue)551 square metres $340,000 Superior Subject land 577 square metres $315,000 - On that basis there is nothing to indicate that Mr Taylor has made a fundamental error; and in using comparisons of sales of vacant lands, he has followed a principle long favoured by courts at all levels (Brisbane City Council v The Valuer-General (1977-78) 140 CLR 41, at 46, per Gibbs J; Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327, at 330).
In his application of his Sale 1 (67 Blamey Drive) at only 75% of the analysed figure, Mr Taylor has been very conservative in that application. It is noted that sale occurred on 28 February 2003, some four days after the issuing of the current valuation in a rising market. However the use of that sale can be supported, as noted in paragraph [45] of the previous decision. Mr Taylor's conservative application allows for the rising nature of the market, and a later date of sale. There is no reason to reject Sale 1 in this matter.
I turn then to the matter of what evidence, if any, can be obtained from unconsummated "offers" in the real estate market. In Australian Courts, only binding contracts to sell and purchase have generally been accepted as evidence of value. The High Court of Australia considered the matter of a written offer to sell a property in McDonald v Deputy Commissioner of Land Tax for New South Wales (1915) 20 CLR 231, and found at 239:
"When the matter has reached the point of a concluded contract, there has been a definite concrete fact established, which not only evidences value, but to some extent helps to create or modify it. Where an owner has actually parted with his land for a fixed sum and a buyer has parted with his money for the land, a clear event has arisen, which, based on the ordinary instincts and impulses of human nature, indicates a consensus of opinion between two adverse parties in the community respecting the value of similar lands."
A similar contractual agreement would also be required in respect of "an offer to buy".
However I note that where a court is satisfied as to the genuineness of an offer to purchase the property, by an arms length prospective purchaser, then that offer ought to be taken into account, not as direct evidence of value, but of considering the possibility of a sale at a price different from that indicated by the conventional analysis of sales. But the weight given to that offer depends upon the circumstances of the particular case. (Goold v Commonwealth of Australia (1993) 79 LGERA 407, per Wilcox J at 414 onwards). However in the current matter there is no evidence of an "offer to purchase" any of Mr Skuthorpe's preferred properties, only the willingness of the respective owners to place those properties on the market. At best those offers could be taken to indicate levels of value for which the sellers would consider parting with their properties. But the "offer to sell" provides no comparable details for effective comparisons with the subject land, and I reject their relevance in this current matter.
Summary:
In summarising this matter I note the onus to prove his case rests upon the appellant under s.45(4) of the Act. I also note that under s.33 of the Act, a valuation of the Chief Executive is deemed to be correct unless proved to the contrary. On the evidence that has not been demonstrated.
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 155 on RP 93664 as determined by the Chief Executive in the sum of Three Hundred and Fifteen Thousand Dollars ($315,000) is affirmed.
NG DIVETT
MEMBER OF THE LAND COURT
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