Spear v Chief Executive, Department of Natural Resources
[1996] QLC 140
•23 October 1996
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BRISBANE
23 OCTOBER 1996
Re: Appeal against Annual Valuation
Valuation of Land Act 1944
Shire of Mareeba (AV95-641)
Marjorie J Spear
v.
Chief Executive, Department of Natural Resources
(Hearing at Mareeba)
D E C I S I O N
Mrs Spear is the owner of land described as Lot 1 on Registered Plan 723493, Lot 1 on Registered Plan 721753, Lot 2 on Registered Plan 723493, Lot 3 on Registered Plan 721402 and Lot 2 on Registered Plan 727288, Parish of Smithfield, containing an area of 3.767 ha. As at 1 January 1995 under the provisions of the Valuation of Land Act 1944 (the “Act”), the respondent determined the unimproved value of that land at $160,000 as one rural residential site.
An objection against that valuation was disallowed and Mrs Spear appealed to the Land Court against the respondent’s decision on that objection, advising that her estimate of the unimproved value was $89,000.
The grounds of appeal were essentially that:
·it was inappropriate for the respondent to increase the unimproved value of the subject land by 94% by relying upon two recent sales with frontage to the Barron River, as there were circumstances related to those sales which were unrelated to the subject land;
·the subject land is affected by overhead powerlines for which sufficient allowance had not been made;
·noise from traffic on the Barron River Bridge affects the unimproved value;
·lack of amenities and services has not been sufficiently considered;
·the valuation is out of relativity with the valuation of neighbouring land (owned by Falvo and Young); and
·the valuation does not take into account the topography and nature of the land.
At the hearing Mrs MJ Spear appeared and gave evidence. The respondent was represented by Senior Valuer, Mr K Allan, while evidence on the respondent’s behalf was given by Mr WB Bowen, a registered valuer, employed by the Department of Natural Resources.
As is apparent from the real property description, the subject land comprises an aggregation of five separately surveyed parcels, which is situated about 3 km north-east of Kuranda and about 26 km north-west of Cairns. The aggregation fronts the Kennedy Highway on the east and Black Mountain Road on the north. Lot 2 on RP 727288, with an area of 2.161 ha, is severed from the balance of the aggregation by an unnamed dedicated road which is unmade at its southern end, but from its junction with Black Mountain Road to the eastern boundary of Lot 3, comprises a narrow formed gravel track providing practical, but not all-weather, access to Mrs Spear’s house on Lot 3.
The land is zoned “Rural A” under the town planning scheme for the Shire of Mareeba. Electricity and telephone services are available.
Mr Bowen described the land as follows:
“The aggregation comprises level to undulating softwood communities which are intersected by gullies. A central level ridge exists in the vicinity of the unnamed road, which falls away from either side. The block has esplanade frontage to the Barron River. River views would be obtainable if a house was sited in the south-eastern sector. Limited rural views exist elsewhere.”
Mrs Spear disagreed with the description of the land as “level to undulating”, saying that the only level land was the area where the house was built, while the balance was, in part, worse than undulating. Mr Bowen virtually conceded those points.
There was also some debate about Mr Bowen’s description of “softwood communities”, but it was generally agreed that the original rainforest had been cleared many years ago and that the thickly timbered eastern Lot 2 was largely wattle regrowth, with some other species which Mr Bowen described as softwood communities. The timber on the balance area seems to be a mixture of fruit trees and other trees planted by Mrs Spear.
Mrs Spear said that she purchased the subject land in 1968 principally because of the climate and the fact that the land was cheap. She said that the thickly timbered large Lot 2 was undeveloped, while the balance of the land had been cleared for grazing. She sited her house on the only level area near the access road.
While she conceded that it would be possible to obtain river views from a house situated to the south of Lot 3 or on the higher parts of the eastern Lot 2, Mrs Spear emphasised the additional cost that would be involved in building at either of those locations because of the difficult terrain. Mr Bowen was of the opinion that a house situated on Lot 2 would minimise the noise effect from the Barron River Bridge.
Mrs Spear saw no advantage in having esplanade frontage. She said that access to the river bank was difficult, the water was filthy and she was not interested in river views. She had built her house on the most suitable site, on the level ground near the access road.
Mr Bowen, who had performed the valuations in the Kuranda area on behalf of the respondent, explained that he had valued the subject land by direct comparison with sales of comparable land in the area. He said that the subject land was one of 12 blocks situated on Black Mountain Road, which had frontage to the Barron River or, more correctly, to the esplanade which physically separated the properties from the river.
In Mr Bowen’s opinion, those lands were “unique real estate”, having frontage to the river esplanade and timbered with what is popularly termed “rainforest”. He said that in the Kuranda locality he had isolated a number of distinct market areas. In the Black Mountain vicinity he considered that there were two separate markets, one for those properties that had access to the river esplanade frontage and another for those that did not.
Of the 12 river esplanade properties, four had changed hands in the last five years, three of them in an unimproved state. From those sales, he came to the conclusion that purchasers were prepared to pay more for blocks with river esplanade frontage.
On the eastern side of Black Mountain Range, there were two large subdivisions, “Top of the Range” Estate and “Rainforest Gardens”, which have blocks with a minimum area of 4,000 m² and an average size of 6,000 m², ranging in sale prices from $60,000 to $85,000, which in Mr Bowen’s opinion set the minimum level of value.
On the other hand, the sales on the western side, with river esplanade frontage, were of larger areas. The sale of Lot 1 on RP 725539, of 9,4447 m², to Martin in February 1989 for $175,000, was included by Mr Bowen as a supporting sale for the purpose of demonstrating the level of prices that had been paid up to four years prior to the date of the subject valuation. That property was a level to sloping softwood forest block, with views of the river, with esplanade frontage, but with 300 metres of access track along a narrow access handle from Black Mountain Road. It was, in Mr Bowen’s opinion, inferior to the subject land and he had applied an unimproved value of $139,000 as at 1 January 1995.
Then in June 1992, Lot 2 on RP 725528, of 6.867 ha, sold to Nooravi for $270,000. Mr Bowen described that land as an undulating softwood block, with no water, gravel road frontage, frontage to the river esplanade, but restricted by gullies and considerable cost was incurred after the sale. Apart from being larger, Mr Bowen considered it to be similar in most other respects to the subject land, except that the latter had better access but was affected by powerlines and road traffic noise. Overall, he regarded the sale as superior and he had applied an unimproved value of $237,500 as at 1 January 1995.
In February 1994, Lot 2 on RP 727725, of 2.021 ha, sold to Cek for $165,000. Mr Bowen described that land in a similar manner to the Nooravi sale, but considered the subject land to be superior because it was larger than the sale land, with better access which, in his opinion, more than offset the negative effects of the powerline and road traffic noise. He applied an unimproved value of $148,000 to that property as at 1 January 1995.
Mr Bowen looked further afield for sales to support the unimproved value applied to the subject land. He referred to the sale of Lot 1 on RP 887895 to Ferguson in September 1995 for $120,000. That property is situated in the Koah area, about 15 km west of Kuranda, with frontage to the Clohesy River. Mr Bowen considered the subject land to be superior to that sale, principally because of its situation.
As additional support for his valuation, Mr Bowen referred to the sale of Lot 1 on RP 724696 in September 1994 for $257,000. That was a sale of an esplanade frontage lot of 9,510 m² to an adjoining owner, improved with a cottage and sheds, which he did not analyse to an unimproved value. He also referred to the asking price for another esplanade frontage property (Cohen’s) and the proposed upset prices for frontage blocks in the “Riverview Park” Estate (Falvo and Young).
However, it is difficult to see how any of the information in the paragraph above was of any assistance to Mr Bowen.
Finally, Mr Bowen referred to the relativity of unimproved values applied to other frontage properties on Black Mountain Road. He referred me to the decision of the Land Court in Spear v. The Valuer-General on 25 October 1991 (not reported), in respect of an appeal by Mrs Spear against the 1990 valuation of the subject land by the Valuer-General. In that decision the learned Member, Mr CH Carter, said at p.2:
“The evidence when viewed as a whole does not convince me that a valuation of $76,000 for the subject land is disproportionate or out of line with that applied to the comparison properties mentioned by Mrs Spear which, like the subject property, have been valued as sites. Certainly the Young and Falvo property is very much larger than the subject but it has been valued at the higher figure of $110,000.”
Mrs Spear again raised the relativity of applied unimproved values as an issue in the present appeal. Her argument was with the quality and size of the various frontage properties, and particularly the relative merits of their frontages to the river esplanade. She said that the attributes of river frontage and views had only assumed importance in the 1995 valuation. However, it is apparent from Mr Carter’s decision in the 1990 valuation appeal that many of the same matters were argued before him. Mr Bowen said that the only alteration to the relativity of the frontage blocks had been a small allowance for the effect of power lines upon the subject land.
The relevant legal principles which are applicable in this case have recently been considered by the Land Appeal Court in Scougall v. Chief Executive, Department of Natural Resources, delivered 13 September, 1996 (not yet reported), where the Court referred to the judgment of the Land Appeal Court in Grahn v. The Valuer-General (1992) 14 QLCR 327. In that case the Court relied on the decision of the High Court of Australia in Brisbane City Council v. The Valuer-General (1978) 140 CLR 41 and the decisions of the Land Appeal Court in cases such as Fischer v. The Valuer-General (1983) 9 QLCR 44 and Barnwell v. The Valuer-General (1989) 13 QLCR 13, as authority for the following proposition:
·it is desirable that valuations made for the purposes of the Valuation of Land Act 1944 of comparable lands should bear proper relativity, one to the other, so long as the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis (Barnwell v. The Valuer-General);
·the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land (Fischer v. The Valuer General and Barnwell v. The Valuer-General);
·Section 33 of the Valuation of Land Act 1944 (formerly s.13(7)) creates a presumption that the value in money terms shown by the Chief Executive (formerly the Valuer-General) in his notice of valuation is correct (Brisbane City Council v. The Valuer-General);
·once it is shown that:
(i)in making the valuation the Chief Executive acted upon a wrong principle, or made a serious error of fact; or
(ii)the valuation was made by a method fundamentally erroneous, the presumption created by s.33 is rebutted (Brisbane City Council v. The Valuer-General);
·whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence ( Fischer v. The Valuer-General);
·if possible, the Chief Executive should obtain uniformity between different blocks in the same land category or type, but should do so (preferably by reference to sales of comparable land) by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error. (Barnwell v. The Valuer-General).
In the present case, Mr Bowen relied upon sales of comparable esplanade riverfront lands. Mrs Spear regarded those sales as being different. She had spoken to both Nooravi and Cek, the purchasers of the two most relevant sales. They told her that they had purchased for the rainforest on those properties and because they wanted peace and quiet. She suggested that the sale prices were high because of the particular beauty of those properties. They had, in her opinion, more attributes to offer than the subject land, their length of river frontage, slope to that frontage, attractive rainforest, access to creek water, to name but some of their features of superiority.
In addition, she suggested that the purchasers (Nooravi, Cek and Martin) were wealthy people attracted more by the stands of rainforest than river frontage. However, Mr Bowen’s evidence was to the effect that from his discussions with Mr Nooravi, he came to the conclusion that the purchase was motivated (at least in part) by the access to and the views of the river. The purchaser’s subsequent actions, the position of his house, the expense undertaken to construct an access road to the house, and his clearing of the timber between the house and the river, all lend support to Mr Bowen’s conclusion.
In applying the sales, it seems that Mr Bowen was mindful of the relativity in the area. Apart from a minor alteration in favour of the subject land, the relativity of the valuations of the esplanade riverfront lands in Black Mountain Road remained the same as it was in 1990. In addition, the valuation of $136,000 applied to the land owned by Butler, of 3.036 ha, situated on the opposite corner of the Kennedy Highway and Black Mountain Road, but without river frontage, appears to be reasonable when compared with $160,000 applied to the subject land.
The method of valuation was direct comparison with sales. I find that to be an appropriate method in this case. I also find that the sales to Nooravi and Cek are the most relevant, backed up to some extent, by the earlier sale to Martin. In applying those sales, Mr Bowen appears to have given careful consideration to the differences with the subject land.
Therefore, as a result of those findings, Mrs Spear has not been able to prove to my satisfaction her grounds of appeal, for which she carried the evidentiary onus. Her main ground of appeal was that she was concerned about the 94% increase. Indeed, an increase of that magnitude in one year would certainly give most land owners cause for concern. However, it would seem that the Martin sale in 1989 was an indication of the trend in which the values for riverfront lands were heading. Some years were to elapse before that level of prices was again paid by Nooravi and Cek. The respondent therefore, correctly in my view, did not increase the value of riverfront lands on the basis of the one sale, but waited until there was more evidence of the trend in values for that type of land in that area.
In all the circumstances, I cannot find that Mrs Spear has shown that the respondent acted upon a wrong principle, or made a serious error of fact. Nor can I find that the valuation was made by a method fundamentally erroneous. Therefore, Mrs Spear has not been able to rebut the statutory presumption of correctness imposed by s.33 of the Act and the appeal must fail.
Accordingly, the appeal is dismissed and the unimproved value of the subject land as determined by the respondent in the sum of One Hundred and Sixty Thousand Dollars ($160,000) is affirmed.
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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