Steers v Valuer-General
[2012] QLC 65
•27 November 2012 [Ex tempore]
LAND COURT OF QUEENSLAND
CITATION: Steers v Valuer-General [2012] QLC 65 PARTIES: Norman Francis Steers
(appellant)v Valuer-General
(respondent)FILE NO: LVA520-12 DIVISION: Land Court of Queensland PROCEEDING: Appeal against valuation under the Land Valuation Act 2010. DELIVERED ON: 27 November 2012 [Ex tempore] DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: Mr PA Smith ORDERS: 1. The appeal is allowed; and
2. The unimproved value of the subject land is set at Four Hundred and Fifty Thousand Dollars ($450,000) as at 1 October 2011.
CATCHWORDS: LAND VALUATION – Methodology – Previous Land Court Decisions – one decision not known to respondent
EVIDENCE – Conflicting evidence as to nature of land and impact of flooding – historical evidence that land in natural state unable to be accessed from street
Land Valuation Act 2010
Valuation of Land Act 1944Goodwin v Valuer-General [2011] QLC 27
NR & PG Tow v Valuer-General [1978] 5 QLCR 378
Hans and Else Grahn v Valuer-General [1992-1993] 14 QLCR 327
Fischer v Valuer-General [1983] 9 QLCR 44
Spencer v The Commonwealth (1907) 5 CLR 418APPEARANCES: Mr Steers, appellant Mrs Johnson, Principal Lawyer for the respondent
Background
I have before me an appeal under the Land Valuation Act 2010 (LVA) that relates to a matter which has been the subject of two previous hearings before this Court. The second hearing before the Court was in matter LVA820-11, which was an appeal against the valuation of the property as at 1 October 2010. That matter was heard by his Honour Mr Isdale, and he gave written reasons for his decision dismissing the appellant's appeal.
After the close of evidence today, I raised with the parties some concerns I had regarding some inconsistencies in the evidence, and also some inconsistencies as to the existence of what has turned out to be the first time this appellant brought a matter to the Court (at that time with his now deceased wife.)
During the recess for the lunch period today, I, through the fine efforts of the Deputy Registrar and Registrar of the Court, have been provided with a copy of a decision of the Land Court, which unfortunately is not dated, but is a decision relating to Appeal AV89-57 that has been taken from the official records of decisions of the Land Court relating to 1989 AV matters. So, I have no doubt that the document which I now hold is a true and correct copy of the decision of the Land Court handed down in or about 1989. That decision was a matter where the land was valued at $45,000 and the appellants contended for a value of $15,000, and in that matter the appeal was also dismissed.
I will not take any time to go into significant detail as to the facts of the case. They have been adequately set out in the decision of his Honour Isdale of 22 March 2012 and in the 1989 decision. I should add at this point that there can be no criticism made of either Mr Steers or the Valuer-General for not having access to the 1989 decision. Unfortunately, this comes before the digital age and is a matter that is by no means easily ascertainable by the Court, and it is probably only a matter of the diligence and good work of the two officers I have referred to of the Court that this copy was able to be found at all, let alone so quickly.
I would make a side note for the benefit of the parties that I know the Court is working on a process to digitalise decisions such as this 1989 one, and I believe it is in the interests of all parties and the Court that decisions of this nature, which tend to come up in later cases more often than we would think, should be digitalised, funds permitting, at a time sooner rather than later.
Now, having said that, there is one clear aspect of the facts of the case that show a stark difference between the 1989 decision and the 2012 decision, and that aspect of the facts carried through into the evidence placed before me today. I make no direct criticism of the Valuer in this matter, Mr Kunnath, because he did not have the benefit of the 1989 decision, and, of course, that decision was therefore not known of at this time by Mrs Johnson either, so no criticism at all is made of her.
The key area of difference in the facts is that the property, which could roughly be described as being in a square shape in the southern part with a right-sided triangle placed on its top as a very inaccurate way of referring to the document, so what one is left with is more or less a four-sided block which rises to the north-eastern side. A copy of the plan is as follows[1]:
[1] Extract from Exhibit 1
The land is to be valued under the LVA in a way different to what one might immediately expect given that the subject land is located in a heavily developed area of Brisbane. One would immediately have thought that this would be a residential or like allotment and therefore subject to the site valuation methodology, however Mr Kunnath has properly advised the Court, which I fully accept, that the property is zoned rural, and accordingly the unimproved value provisions of the LVA as set out in s.7 and following relevant sections apply.
This means that all of the previous decisions of the Land Court relating to decisions under the old Valuation of Land Act 1944 (VLA) relating to unimproved value and those more recent decisions of the Court under the LVA relating to rural properties remain relevant.
The key factor is the land is to be valued taking away all the improvements made to the site. This becomes extremely important when one considers the evidence relating to fill in this matter and this is an aspect which I note his Honour Mr Isdale, did not have the benefit of the material that is before me today.
As I see the distinction between the 2012 case and the 1989 case, the 2012 case has proceeded on what, to me, seems to be the assumption that the area of access to the land, following from the cul-de-sac of the street, along the northern boundary of the property, running in a north-easterly direction to the house site, as well as the house site, has substantially been able to be obtained in an unimproved state.
The evidence before me and in particular that of the Land Court's decision from 1989, is consistent with the evidence given by Mr Steers today, and that is that the only area truly out of the reach of flood waters was the area of the upper half of the triangle to the north-east corner of the allotment, and that access to the allotment at the time the house was built was in between lots 11 and 12 and not along the front northern boundary of the property.
The Land Court in 1989 took that into account as did the Valuer at the time in allowing a reduction from what would otherwise have been the unimproved value of the land of $60,000 to $50,000 representing the cost to make a proper access to the property[2]. This issue is important when I look at the evidence placed before me today.
[2] See Decision of Norman Francis Steers & Edna Lorraine Steers v Valuer General AV89-57 (Unreported)
Like in so many matters before the Land Court, it is a case where an appellant comes to Court with a lifetime of knowledge of a property but without the benefit of professional, independent valuation evidence. And given the fact that the appellant is an aged pensioner of 83 years of age, and he has indicated the costs involved in properly having valuation and other evidence before the Court, I can understand why the case has proceeded in the absence of valuation evidence brought by appellant but it does not make the job of the Court any easier.
On the great bulk of the evidence and material placed before the Court, I accept the evidence of Mr Kunnath as to his valuation methodologies, the sales evidence he has referred to and the appropriate value of the property. I also though, accept the evidence from the appellant, Mr Steers, as to the manner of accessing the property and the former lay of the land in its pre-filled state as shown in the material that he has placed before the Court which was also before the Court in 1989, but which I understand was at least not entirely before the Court, before Mr Isdale.
In this regard, I should refer to the valuation report from 1989 of Mr Rylands[3] who is a long-time Valuer employed by the Valuer-General. Mr Rylands refers to a plan reflecting the creek meandering "in a circular flow close to the north-west corner of the property"[4]. This is certainly consistent with the findings of the Land Court in 1989 as to the disability in relation to accessing the north-eastern corner of the land where a housing site is available via the cul-de-sac at the north-west corner of the land.
[3] Contained in Exhibit 2
[4] Page 2 of the report contained in Exhibit 2
Mr Kunnath, in his evidence, has referred extensively to Council flood mapping both with respect to the subject property and other properties. Indeed, he made particular reference to the similarities between the flood mapping from 2009 and contours as set out in Exhibit 7 with those as shown on page 8 of his report which is Exhibit 5. It is certainly the case that there is a close parallel between what is the blue marking of the flood lines on Exhibit 5 and the pink markings on Exhibit 7.
However, those do not properly align up to the 1989 evidence, particularly with respect to the location of the creek and its impact on the north-west corner of the property prior to the extensive filling undertaken by Mr Steers.
In many ways, the state of the evidence in this matter leaves me in a state of confusion wrapped in a conundrum, and that is due to the lack of detailed evidence consistent with the 1989 report as to the cost of filling and retaining the land to enable the proper access to be obtained to the building site, taking into account the unimproved value of the land, not a site value of the land. I do not accept that the sum of $19,000[5] referred to by Mr Kunnath is appropriate, particularly given that the sum in 1989 dollars was said to be $10,000[6]. With the costs of living and inflation and other building costs, the two are certainly by no means comparable.
[5] Exhibit 5, p18
[6] See Decision of Norman Francis Steers & Edna Lorraine Steers v Valuer General AV89-57 (Unreported)
However, I do accept Mr Kunnath's evidence regarding the balance of the land, meaning the area not subject to access or the house building site, and the amount of fill that Mr Steers has placed on the land in that balance area as being of no benefit to the value and something which should not be taken into account. I see no reason to depart from the reasoning of the Land Court in 1989 that access can properly be obtained by way of the north-western corner with an appropriate allowance being taken into account.
I accept the sales evidence that Mr Kunnath has put forward and I accept, in general terms, the comparisons that he has made between the subject and the sale properties, save for reference to the area of land on each which is directly comparable for outside of flood influence zones. And in that regard I have a higher regard for the mapping evidence contained within Exhibit 2 provided by Mr Steers which was before the Land Court in 1989 showing the top half of the triangular part of the block as being the area where the house is located as that area which, in its natural state, was a suitable housing block not requiring any fill.
I am mindful in this case of the relative costs to both Mr Steers and the State in the scheme of things, although no doubt very important to Mr Steers, is not a matter of huge economic benefit for either party. Mr Steers has by his own admission during submissions, stated that he cannot really expect - and I will caution him in this regard soon - a reduction to his contended $50,000 amount. Additionally, it is a matter where the Valuer-General is undertaking a statutory process which is used in this case for rating purposes which is of no direct benefit for the Valuer-General.
Nevertheless, it is a case where the Court has to do the best it can with the evidence it has before it, without the benefit of significant amounts of engineering and certified quantification as to the actual costs of providing the access. None of that evidence is before me in any realistic way in this case.
I accept the force of Mrs Johnson's arguments and the references she has made to the decisions of this Court. I should make particular reference to her reliance upon the case of Goodwin v Valuer-General[7] and NR & PG Tow v Valuer-General[8]. And other cases such as Hans and Else Grahn v Valuer-General[9] and Fischer -v- Valuer-General[10] and others.
[7] [2011] QLC 27
[8] [1978] 5 QLCR 378
[9] [1992-1993] 14 QLCR 327
[10] [1983] 9 QLCR 44
The impact of those cases, some much more directly than others, I can summarise this way: it is not the role of a Valuer appearing before this Court to have regard to the percentage of cost increases from one year to another. It is the case in this Court that land values alter, depending upon market trends. Leading up until the global financial crisis, many people had fallen into the view of thinking that land values never went down, it only always went up. But of course, that is folly and now there is a much more realistic understanding that land values are simply subject to the market movements and the market can go up or down.
Sometimes the amount that the market goes up and down can be by extreme amounts particularly in boom times. This though, cannot enter into the Valuer's understanding or consideration; it is simply a case that if there are proper cases before the Court, of comparable properties that have been sold in an open market meeting the Spencer[11] test, then even if the market has shown increase of 1,000 per cent or a decrease of 500 per cent, it matters not. What is important is the market value of properties at the dates of sale and a proper translation of that market evidence to any subject property being considered on a like for like basis doing the best the Court and the Valuer can with its use of relativity.
[11] Spencer v The Commonwealth (1907) 5 CLR 418
At this point I will refer specifically to Mr Steers in his contended for $15,000 valuation in 1989 and a $50,000 valuation both in the 2012 decision from March and in this decision. It is unrealistic in 2012/2011 to think that any block of land in the Brisbane developed area which can be suitable for a housing site can be valued at $50,000. It must, as a starting point at least, be the value properly ascribed to a building site within the normal residential areas in the surrounding area. It certainly cannot be any less than that. If Mr Steers is to make any further appeals in the future I caution him to contend for a realistic value supported by market evidence and not for a value which may be consistent with the price paid for the property originally, but nonetheless, no longer is relevant to the market in 2012.
I also, as I have indicated, accept the sales referred to by Mr Kunnath in his valuation report contained in Exhibit 5 but make an allowance to the relativity that he has referred to in his report, due to the unfortunate errors that have arisen due to the differences in evidence between the 1989 and the 2012 decision. I have decided to attempt to resolve the matter in this way.
Looking as best I can at the 1989 decision and reducing it to a base level, it could be said that the subject land received a reduction of 16.5 per cent in 1989 because of difficulties of access. I know that that is, in many ways, an over-simplification because it is not strictly comparing apples with apples but on the state of the evidence before me, I cannot do much else.
If that was to be applied to the current case, and accepting the formulation that Mr Kunnath has used to arrive at the value of $515,000, a couple of things have to occur. Firstly, the amount that has been removed from $515,000 by way of fill of $19,000 must be re-added which would take the value to $534,000. If I then applied a reduction of 16.5 per cent, one comes down to a figure of $445,890. If a figure of 15 per cent is applied, one comes to a figure of $453,900.
In trying to give some certainty to all of the parties, moving forward in this case, and having had the opportunity of viewing the property and considering all of the evidence that I have seen before me and the 1989/2012 decision, I have decided to adopt what I will call a disability of access provision for the block to save everybody the cost of getting engineering and other reports because I have some doubts that an accurate figure will ever be arrived at due to the nature of the changes. I allow a discount of 15 per cent due to the difficulties of access. Using rounding, that then leads to a value for the subject property as at 1 October 2011 of $450,000.
On the basis of the reasoning I have referred to, I therefore allow the appeal and set the unimproved value of the subject land as at 1 October 2011 at $450,000.
Orders
1. The appeal is allowed; and
2. The unimproved value of the subject land is set at Four Hundred and Fifty Thousand Dollars ($450,000) as at 1 October 2011.
PA SMITH
MEMBER OF THE LAND COURT
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