Stay Developments Pty Ltd as trustee for DWS Family Trust v Chief Executive, Department of Natural Resources

[1999] QLC 95

[1999] QLC 95

 

LAND COURT,

BRISBANE

10 September 1999

Re:     Appeal against Annual Valuation –

Valuation of Land Act 1944 –
  Valuation Roll No 6419 –
  Local Government: BCC-Enoggera
  (AV98-575).

Stay Developments Pty Ltd as trustee for DWS Family Trust

v.

Chief Executive, Department of Natural Resources

D E C I S I O N

Background:

This matter relates to a property at 71 Osborne Road, Mitchelton, located about 8.5km north-west of the Brisbane GPO, and described as Lots 56 and 57 on RP 18795, Parish of Enoggera.  The subject land is located in a small area of commercial development adjacent to the Brookside Regional Shopping Centre.  Osborne Road is a two-way, 4-lane bitumen sealed road with concrete kerbing and channelling, and provides a direct link between Samford Road to the south, and Pullen Road to the north.  There are traffic lights in front of the subject land, which is only 100 metres from the Mitchelton Railway Station.  The key issues are the use of the land, the impact of zoning, and comparisons of sales.

The history of the valuation is discussed later, but the grounds of this appeal reveal that the Chief Executive has applied a valuation to the subject land at the relevant date of 1 January 1996 of $220,000, to which the appellant has appealed, claiming the amount should more properly be $64,000.
           Mr Doug Stay, director and experienced builder/developer, represented and gave evidence for the appellants.  Mr J O'Rourke, Legal Officer, appeared for the respondent, calling evidence from Mr MW Cowley, the Departmental registered valuer responsible for determining the valuation.

(1)The Nature of the Land –

The subject land is a relatively gentle to moderately sloping land towards Osborne Road, and is comparatively low-lying compared to the surrounding lands.  All normal services are available, and the land has a frontage to Osborne Road of 20 metres, a depth of 60.75 metres, and an overall area of 1,214 square metres.  However because of a condition of the rezoning approval requiring the dedication of part of the land fronting Osborne Road as new road, the effective area for valuation has been taken as 1099 square metres.

(2)The History of the Valuation –

On 26 February 1996, the Chief Executive issued a valuation for the subject land at 1 January 1996 at $69,000, with the date of effect of 30 June 1996.  At that time it was agreed that the subject land was occupied by a single dwelling which was used as the residence for a Mr McKillop and his son.  On 17 March 1997 the Chief Executive issued a subsequent valuation as at 1 October 1996, at $69,000, with the date of effect of 30 June 1997.

Subsequent to that second valuation the Chief Executive became aware of the gazettal of the rezoning of the subject land, which occurred on 13 September 1996, and on 20 May 1997 amended the valuation at 1 January 1996 to $220,000, with effect from 13 September 1996.  On the same day (20 May 1997) the Chief Executive also amended the valuation for the date of 1 October 1996 to $250,000, with effect from 30 June 1997.  On 11 August 1998 the Chief Executive rejected an objection from the appellant, and confirmed the valuation at 1 January 1996 at $220,000.  On 23 September 1997 the Chief Executive confirmed the valuation at 1 October 1996 at $250,000.  On 11 September 1998 the Land Court upheld that valuation at 1 October 1996, (V97-391, 11 September 1998, unreported).

The reason why the subsequent valuation at 1 October 1996 was determined by the Land Court prior to this current matter, was because the objection against the valuation at 1 January 1996 was overlooked and not responded to by the Chief Executive until 11 August 1998.  The Chief Executive amended the valuation of the subject land under section 28 of the Act.

(3)The Use of the Land –

Prior to the current valuation at 1 January 1996 the subject land was used by a single family as its place of residence, and the land was accordingly afforded a concessional valuation under section 17 of the Valuation of Land Act (the Act). On 13 December 1995 the appellant purchased the property with a contract subject to a rezoning of the land, but with a final date for settlement of 30 June 1996. An application was lodged with Council on 28 December 1995 to rezone the land from "Residential" to "Business", and to use the land for business purposes. That was subsequently proceeding satisfactorily with the Brisbane City Council (the Council), and on 30 June 1996 the appellants made final settlement, having assessed the risk of completion of the zoning process. The approval of Council was subsequently obtained on 2 August 1996, and the land was rezoned by notice in the Government Gazette of 13 September 1996.

On completion of the contract of sale on 30 June 1996, the existing McKillop family on 1 July 1996 vacated the dwelling, which substantially then remained vacant until the dwelling was removed from the site sometime preceding 23 October 1996, at which time Mr Cowley observed that the site was then vacant.  Mr Stay advises that he arranged for the removal of the dwelling by a removalist, who purchased the dwelling, and who lodged an application with Council to remove the dwelling on 20 June 1996.  The Council approved that removal on 11 July 1996.

On noting that the land had been rezoned to "Business" on 13 September 1996, the Chief Executive revised the section 17 concessional valuation from that date, and moved to revalue the land for business purposes. There was no evidence provided to the Chief Executive that the dwelling had continued to be used for single family occupation since 1 July 1996, but the respondent elected to accept the date of rezoning as the effective date of the change of use for valuation purposes. Mr Stay confirms that there was no ongoing regular use of the dwelling between 1 July 1996 and the date of removal, which I will accept as at 23 October 1996.

(4)Legal Implications –

A matter of major concern to the appellant is the current difficulties being experienced in seeking to implement the rezoning approval of Council, in respect of the provision of access to the site.  Those matters were addressed by the learned Member of this Court in his decision of 11 September 1998, and are not relevant to the grounds of appeal in this matter.  However Mr Stay argues that it is not correct to value the land for business purposes at 13 September 1996, when it is not currently legally possible to exercise that zoning under the current approval conditions.

At the date of sale the subject land was owned by the former owners of the Brookside Shopping Centre (Brookside Properties).  The shopping centre is now owned by Yu Feng Pty Ltd who, Mr Stay is led to believe, would now resist any rezoning of the subject land.  Mr Stay's current legal advice is to lodge a further rezoning application to seek to change the current unworkable conditions.  However such a strategy is fraught with risks in regaining an approval, and possible costs of seeking a decision in the Planning and Environment Court.  It is also noted that subsequent to the rezoning approval, a new commercial building (900 square metres) has been constructed, which is currently leased to two tenants, both of whom have registered caveats over the title to protect their interests.  The obvious risks incumbent upon the appellant in the event of his being unable to successfully renegotiate a fresh rezoning with workable conditions in respect of access, weigh heavily on Mr Stay.

For the purpose of this matter however, his concern lies with whether the difficulties of implementing the rezoning approval would affect the value of the land at the relevant date.  The matter of access to the new building is further complicated by the acknowledgment of Mr Stay that he physically provided an illegal concrete driveway to the building, in contravention of a Council direction.  Mr Cowley was unaware of the full context of the access problems, or the likelihood of Mr Stay's need to have to seek fresh re-zoning approval.

(5)Comparison of Sales –

Mr Stay provides no sales to support his estimate of the unimproved value, but argues that the sale of the subject land in December 1995 was on the basis of a successful rezoning to "Business", a matter not yet concluded.  He also notes that Mr Cowley's Sale 2 is out of date having occurred in May 1993. 

In support of his valuation Mr Cowley provides the following sales:

·    Sale 1 – (71 Osborne Road, Mitchelton – Lots 56 and 57 on RP 18795).

This is the subject land which sold in December 1995 for $260,000 ($237 per m²).  After allowing for improvements the sale was analysed at $250,500 ($228 per m²), and applied at $220,000 ($200 per m²).

·    Sale 2– (87 Osborne Road, Mitchelton – Lots 12 and 13 on RP128080).

This is a 1057 square metre (net) lot (now Lot 12 on RP 818304) on the adjoining corner of the access way to the Brookside Shopping Centre, about 50 metres north of the subject land.  The sale is similar, but has a slightly inferior parking access to the subject land, and is slightly inferior.
The sale sold in May 1993 for $265,000 ($251 per m²) which after allowing for improvements was analysed at $263,500 ($249 per m²), and applied at $200,000 ($189 per m²).

Mr Cowley argues that Sale 2 demonstrates that the market was static between 1993 and 1996, and Sale 2 supports the market for Sale 1, and that the purchaser of Sale 2 (Seymour Land) also had to proceed through a similar rezoning exercise to the subject land.  Mr Stay does not contest the value of the land for a commercial business purpose, but argues that the land was not used for such a purpose at the date of valuation of 1 January 1996.  He argues that the current defect in the rezoning approval would severely limit the market value of the subject land at the date of valuation.

Decision:
           I turn first to the evidence of sales and note that the appellant does not challenge the two sales adopted, nor the concluded valuation for the purpose of business use.  On that basis, if the current use adopted for the valuation at the relevant date is found to be correct, then the valuation at $220,000 would not be upset.
           In respect of the nature of the land, and the affected area as a consequence of the rezoning, I find that Mr Cowley's net area of 1099 square metres has some inconsistency with the rezoning approval which I understand to be as follows:
           Total area  =  1214m²
           Less new road (20m x 5.5m)    =   110m²

Less rear easement access       =   130m²  (20m x 6.5m)

Net Effective Building Area      =   974m²

If I then adopt the applied rate of $200 per square metre I could arrive at an unimproved value of:

974m² @ $200/m²                  =  $194,800

Area of easement at say 50%

(130m² @ $100/m²)                =  $  13,000
           Total Value  =  $207,800
  Say $210,000

However Mr Stay has not challenged that unimproved value for business purposes, and it is not the role of this Court to go beyond the grounds of appeal of the appellant in this matter.
           In this respect it has been found that the Land Court is not to be an investigating tribunal.  In the decision of JL and I Qualischefski and Ors v. Valuer-General (1979) 6 QLCR 167, the Land Appeal Court said at page 172:

" The reasonableness of the allowances that have been made is always open to challenge on objection or appeal. However upon appeal a statutory onus of proof is cast upon the appellant and he has to accept, within the confines of the grounds set out in his Notice of Appeal to the Land Court, the burden of proving the Valuer-General incorrect. Neither this Court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-General to substantiate his case. This is in contradistinction to jurisdiction conferred under the Land Act.

In appeals of the nature of the subject, the onus which the appellant must assume is not an easy one to discharge without the assistance of a registered valuer who can lead evidence as to sales analyses and/or comparison with valuations made by the Valuer-General in respect of comparable properties."

If I then consider the history of the valuation I find that the effective date of a valuation is the date of the valuation as established by the Chief Executive under section 18 of the Act for a general valuation, under section 37 for an annual valuation, and under section 20 for other valuations.  Accordingly the date of 1 January 1996 is an administrative date to which all relevant unimproved values are to be determined for the annual valuations at the period of time in question.

I note also that section 20 states:

"20.  The chief executive shall fix the date on and after which any valuation or alteration of any valuation of any land made by the chief executive under this Act, save –

(a)a general valuation; or

(b)an annual valuation; or

(c)a valuation or an alteration of a valuation the date of the coming into force whereof is fixed, or to be fixed, otherwise by or pursuant to this Act;

shall, subject to objection or appeal under part 6, be the valuation of that land and the notice of valuation shall specify that date."

I note also that under section 28 the Chief Executive has the power to amend a valuation, where he concludes that there has been a change in land use, such as for the purpose of a single dwelling house.  That section provides:

"28.(1)  No alteration shall be made in the valuation of any parcel of land during the period during which any general valuation or annual valuation relating to the area in question is in force or, in the case of a general valuation or an annual valuation which has not come into force, during the period between the issuing of an annual valuation notice under part 4, or a notice of valuation under part 6, and the date of the valuation coming into force –

(f)unless, being land exclusively used for purposes of a single dwelling house or farming when valued, that land ceases to be used for either of such purposes whereby the valuation is, having regard to the provisions of section 17(1) and (2), in the opinion of the chief executive, altered; "

The Chief Executive may then alter such valuation under section 29(1).

(i)The Use of the Land –

The key issue in this matter is the use that was being made of the subject land at the relevant date.  While the date of the annual valuation is determined to be at 1 January 1996, the relevant date of effect of the amended valuation under section 28 was 13 September 1996.  The matter to be determined is the use of the land at that latter date.

On the evidence before me it is clear that the old dwelling was removed from the site sometime prior to 23 October 1996.  It is also proven that the zoning of the land changed from "Residential" to "Business" with the gazettal notice of 13 September 1996.  How that new zoning is to be implemented is a separate matter for consideration in another place.

However the use of the land must also be considered in the context of whether the land is eligible to be afforded a concessional valuation under section 17 of the Act. That statute states:

"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.

(2)In subsection (1)

'a single dwelling house' means –

(a)    a dwelling used solely for habitation by not more than      1 family;  "

In seeking to understand the eligibility of the subject land to satisfy section 17 it is noted that the Act defines the land to be "exclusively used for the purposes of a single dwelling". The word "used" has a legal interpretation in that it must be actually used, and not contemplated or intended to be used nor be suitable for use. (See London and South Western Ry Co v. Blackmore (1870) LR 4 HL 610 at 617; and reported by the Land Appeal Court in AR Thomason v. Chief Executive, Department of Lands (1994-95) 15 QLCR 286, at 293.)

In seeking to understand the meaning of the word "exclusively" I note that its ordinary English meaning is taken to be "singly or solely", or "excluding all but what is specified".  (See The Shorter Oxford English Dictionary page 698). A wider use of the word "exclusively" was also considered in respect of the use of the land for farming purposes under section 17(2), in the decision of Thomason v. Chief Executive, Department of Lands (supra) where the Land Appeal Court extended the common English understanding to include the concept of "dominant use".  However that wider meaning relates to the business or industry activities undertaken upon the land for farming purposes, and the Land Appeal Court noted at page 300:

"There is no suggestion that the Parliament intended to eliminate the very categories of land which section 11(1)(vii) was enacted to protect.  Furthermore, the fact that the meaning of 'exclusively' is now broader than its ordinary English meaning should not be construed as having as its corollary that the ordinary English meaning is thereby eliminated.  "

In the context of the current matter, in order to satisfy the legislative intent of section 17, it would be necessary that the subject land was actually used as a single family residence at the relevant date at the change of value at 13 September 1996. On the evidence before me I believe the dwelling was still in existence at that date, but there was no evidence of constant occupation beyond 30 June 1996. For those reasons I find that the subject land did not satisfy section 17 at the date of amending the valuation under section 28.

The implications of such a finding are that the unimproved value of $69,000 (for section 17 purposes) would be effective from 30 June 1996 until 12 September 1996; and the revised unimproved value would then be effective from 13 September 1996 until the succeeding valuation became effective.

Summary:
           Under section 33 of the Act every valuation determined by the Chief Executive is deemed to be correct unless proved to the contrary.  While the onus is upon the appellant to prove his grounds of appeal under section 45(4), precedent dictates that once it has been shown that the Chief Executive made some error in method or calculation, then section 33 is found to not apply (see Brisbane City Council v. Valuer-General (1977-78) 140 CLR 41, at 56). I note also that where there is some uncertainty in determining a valuation for revenue cases, then the appellant should be given the benefit of the more conservative estimate of value (see Commissioner of Succession Duties (SA) v. Executor Trustee and Agency Company of South Australia Limited and Others (1947) 74 CLR 358, at 373. However as stated previously it is not the role of this Court to require the respondent to substantiate his valuation in the absence of challenge from the appellant.

Conclusion:
           Having considered the whole of the evidence I am not persuaded that the appellant has proved his case.  The unimproved value as determined by the Chief Executive in the sum of $220,000 is affirmed.

(NG Divett)
Member of the Land Court