Slack v Department of Natural Resources and Mines
[2006] QLC 32
•9 June 2006
LAND COURT OF QUEENSLAND
CITATION: Slack v Department of Natural Resources and Mines [2006] QLC 32 PARTIES: Mary Elvia Slack
(appellant)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO: AV2005/0470 DIVISION: Land Court of Queensland PROCEEDING: An appeal against an annual valuation of land under the Valuation of Land Act1944. DELIVERED ON: 9 June 2006 DELIVERED AT: Brisbane HEARD AT: Hervey Bay MEMBER: Mr RS Jones ORDER: The appeal is dismissed. CATCHWORDS: Section 33 Valuation of Land Act 1944-rebuttal of presumption of correctness of statutory valuation – onus of proof – reliability of sales evidence. APPEARANCES: Mrs M E Slack, in person for the appellant
Mr K Fisher, of counsel, for the respondent
These proceedings concern an appeal by the appellant, Mrs Slack, against a decision made on behalf of the respondent concerning the unimproved value attributed to her land. The appeal is brought pursuant to Ss.55 and 56 of the Valuation of Land Act 1944 (VLA).
Background
The subject land is described as Lot 1 on Registered Plan 72096, Parish of Urangan and is 615 square metres in area. The land is zoned "Residential Low Density" under the transitional town plan for the city of Hervey Bay and is located on the southeastern corner of Cypress and Margaret Streets, Urangan. Urangan is a suburb of the coastal city of Hervey Bay. Consistent with its zoning, the land is used for single residential dwelling purposes.
Mrs Slack objected to the respondent's assessment of the unimproved value of her land which was originally determined as at 1 October 2004 (effective as at 30 June 2005) in the amount of $149,000. Following the lodgement of her objection to the valuation Mrs Slack and representatives of the respondent attended a Court supervised preliminary conference conducted at Hervey Bay. Following that conference the respondent issued a new valuation pursuant to s.68 of the VLA in the amount of $142,500. Mrs Slack considers that the new valuation is still excessive and contends that the unimproved value ought not exceed $100,000 or thereabouts.
At the hearing of this appeal on 30 May 2006 Mrs Slack appeared in person. The respondent was legally represented by Mr K Fisher of counsel and also relied on the evidence of Mr D Gaedtke a registered real estate valuer employed by the respondent.
Issues in the Appeal
As the land is "improved land" Ss.3(1)(b) and 3(2) of the VLA are relevant and provide:
3(1) For the purposes of this Act –
unimproved of land means –(a)…
(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.
(2) However, the unimproved value shall in no case be less than the sum that would be obtained by deducting the value of improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this Act.
Mrs Slack identified five external "factors" which she said the respondent did not sufficiently bring into account when assessing the unimproved value of her land. These are, first the access difficulties via Cypress and Margaret Streets due to a large traffic island and trees respectively. Second, the nuisance caused by street lighting over the roundabout located at the intersection of Cypress and Margaret Streets. Third, odours emanating from drainage vents. Fourth, the loss of views and last, the proximity to what Mrs Slack described as "high voltage power lines". It became reasonably clear that the access and street lighting problems were the ones that caused most distress. Mrs Slack went to considerable trouble to give particulars, to which I have had regard, of the issues and matters considered by her to be important in her statement, Exhibit 1.
Mr Gaedtke, in carrying out his valuation, had regard to the sales of a number of relatively nearby properties. At page three of his report Mr Gaedtke expressed the view that the valuation of $142,500 was a conservative figure which took into account all of the advantages and disadvantages associated with the land. Specific mention was made of the access and odour issues. In his report (Exhibit 7), under the heading "Basis of Valuation" Mr Gaedtke also stated that "in comparison to similar properties, it is considered sufficient allowance has been made to reflect any disadvantages with the site". In his evidence in chief, Mr Gaedtke confirmed that view by stating that nothing said by Mrs Slack in her evidence caused him to have any concerns about the validity of the unimproved value he attributed to the land.
Mr Fisher, on behalf of the respondent, in his final address made specific reference to two matters. First, he directed my attention to the statutory presumption of correctness afforded to the respondent's valuation pursuant to s.33 of the VLA. Second, he referred to the Court's preference for valuations based upon the sale of vacant or lightly improved comparable land.[1]
[1]See for example: Fischer v The Valuer-General (1983) 9 QLCR 44 at 46 (LAC); Grahn v The Valuer-General (unreported decision of the LAC, 20 November 1992 – AV90/472, AV 90/473).
Pursuant to s.33 of the VLA the valuation appealed against is deemed to be correct and therefore the appellant bears the burden of proving that it is wrong. However, it is now well established that this statutory presumption of correctness can be rebutted where it is shown that the valuation was based on a wrong principle and/or involved a significant error of fact and/or was made by a fundamentally erroneous method.[2]
[2]Brisbane City Council v The Valuer-General (1977-78) 140 CLR 41 at 56-57: G Cominos & Co. Pty Ltd v Chief Executive, Department of Lands (1996-97) 16 QLCR 311 at 331-332 (LAC).
Three of the sales referred to by Mr Gaedtke in his valuation occurred in 2002. These sales were included not as evidence of the unimproved value of the land as at 1 October 2004 but as evidence of the increase in real estate prices in the area between 2002 and 2005. In my view, the same could be said about the sale of Lot 24 on Registered Plan 96661 which occurred on 3 July 2003. Accordingly, these sales do not provide any probative evidence of value as at 1 October 2004.
I also reject Mr Gaedtke's first sale which occurred on 14 July 2005 as reliable sales evidence. It was Mr Gaedtke's opinion, which I accept, that the market continued to rise from 1 October 2004 into 2005 and that the closer land was to the Esplanade the more valuable it tended to become. This sale is located in Hockey Lane one lot removed from the Esplanade. Yet another point of distinction between this sale and the subject is its zoning. The subject land is zoned "Residential Low Density". The sale is zoned "Residential Medium Density". Apparently, on land adjoining this sale and fronting the Esplanade, duplex development has occurred and it is quite possible that the sale site would have the same development potential.
I also reject Mr Gaedtke's Sale Six for two reasons. First, it is approximately twice the area of the subject and, more importantly, Mr Gaedtke could not discount the potential that this site might have had for more intensive development.
I accept Mr Gaedtke's Sale Three and his sales identified under the heading "Sale Number Four" dated 3 November 2003 and 2 February 2005 and, to a lesser extent his Sale Five as being reasonably reliable sales evidence. In this context, I note that Sales Three and Four involve only lightly improved parcels of land.
The only sales evidence to which Mrs Slack had regard was the sale of Lot 7 on Registered Plan 35353 which occurred on 1 September 2004. This property fronts Margaret Street and is improved with a two-story timber dwelling and associated improvements. The sale price was $316,000. According to Mrs Slack, after deducting the replacement cost of the dwelling the residual site value was $116,000 and, having regard to the larger area, closer proximity to the beach and there being no odour or street lighting problems, this figure supported an unimproved value of about $100,000 for the subject land. In respect of this sale I accept Mr Gaedtke's evidence that Mrs Slack's analysis of this sale is flawed. Importantly, in my opinion, it confuses or fails to properly distinguish between the concepts of the cost of replacing an equivalent dwelling on the land with the actual value that that dwelling might have in association with the land in the open market. As Mr Gaedtke rightly identified "cost" does not always equal "value". It is the "…value of improvements…" and not the "cost of (replacing) improvements" that is relevant to s.3(2) of the VLA.
Having regard to the totality of the evidence I have no doubt that the external factors identified by and relied on by Mrs Slack are of a real concern to her and, with the possible exception of the power lines, are factors which would tend to have a downward influence on the value of the land. However, on balance, I am not persuaded that Mr Gaedtke, in arriving at his assessment of the unimproved value of the land, did not have proper regard to all of the factors identified by Mrs Slack. Accordingly, I find that the presumption of correctness provided by s.33 of the VLA has not been rebutted and that Mrs Slack failed to put forward sufficient probative evidence to prove that the valuation appealed against is wrong and that the unimproved value as at 1 October 2004 should be less than $142,500.00.
For the above reasons the appeal must be dismissed.
Order
The appeal is dismissed.
MEMBER OF THE LAND COURT
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