Stubberfield v The Valuer-General
[1994] QLAC 21
•1 June 1994
|
BRISBANE
1ST JUNE, 1994
Appeal against Decision of Land Court -
City of Brisbane -
Division of Kedron
AV89-508
John R Stubberfield and Dorothy May Stubberfield
v.
The Valuer-General
J U D G M E N T
This is an appeal against the decision of a Member of the Land Court, Mr White, dismissing an appeal by the appellants, Mr and Mrs Stubberfield, against the determination of the Valuer-General that the unimproved value of Lot 11 on RP 29006 in the Parish of Nundah, County of Stanley (the "subject land") as at 31 March 1988 was $75,000. In their original Notice of Appeal, the appellants contended that, at that date, the unimproved value of the subject land was $50,000. At the hearing before this Court, the appellants contended for a value in the range of $50,000 to $54,400.
The valuation of the land and the decision on objection were made by the Valuer-General. On 26 March, 1993 the office of the Valuer-General ceased to exist. By operation of the Lands Legislation Amendment Act 1992 (Act No 64 of 1992) a new section 6 was inserted in the Valuation of Land Act 1944. It provides: "A reference in any Act or document to the Valuer-General is a reference to the chief executive". For present purposes, therefore, it is appropriate that the Chief Executive, Department of Lands, be the respondent in these proceedings in place of the defunct Valuer-General.
In these proceedings, the appellants were represented by Mr J R Stubberfield and the respondent was represented by Mr R Paterson.
The Subject Land
The subject land is a rectangular block with an area of 1.016 hectares situated at 69 Lacey Road, Carseldine, approximately 14 radial kilometres north north-west of the Brisbane Central Business District. Lacey Road consists of a bitumen strip construction falling to sharp earth drains on either side. Access to the site is by way of a culvert traversing the earth drain. The access is well constructed but is subject to erosion problems during heavy water flow.
Water, electricity and telephone services are available to the property. Sewerage is unavailable. Transport services include the Carseldine train station (located 2 kilometres away by road) and bus services which travel along Beams Road which intersects Lacey Road some 500 metres south of the subject land.
The land has a gentle fall to the north and is generally above road level. It is subject to some run-off from neighbouring properties, but is well drained. Elevation is fair but no views are available from the subject land.
The land is zoned "Future Urban" under the City of Brisbane Town Plan, gazetted on 13 June 1987 and effective at the relevant date of valuation. It is used for single unit dwelling purposes, the predominant development in the immediate locality being of a rural/residential nature. The land adjoining to the north, however, was used at the relevant date for a sawmilling and timber yard operation. There are a number of visually unattractive buildings on that land.
The central issue in this case was the extent to which the unimproved value of the subject land was affected at the relevant date by the use of this adjoining land.
Preliminary Issues
Before considering the substantive issues raised by this appeal, it is necessary to make rulings or record rulings previously made on a number of preliminary issues, namely:
(a)what the grounds of appeal are in these proceedings;
(b)when the hearing of the appeal commenced;
(c)the nature of the burden of proof borne by the appellants in these proceedings; and
(d)what evidence has been admitted in these proceedings.
In order to describe the context in which those issues arose and the way in which they have been resolved, it is appropriate to record a brief chronology of events preceding the hearing on 29 March 1994 and to quote the relevant provisions of the Land Act 1962 governing the making of appeals to the Land Appeal Court.
The decision of the Land Court was delivered on 2 February 1990. The appellants' Notice of Appeal to the Land Appeal Court was lodged on 28 February 1990, well within the period for the lodgment of appeals set out in section 44(11) of the Land Act 1962.
The Notice of Appeal to the Land Appeal Court listed the grounds of appeal as all those grounds contained in the Notice of Appeal to the Land Court in AV89-508 and five additional grounds. The grounds of appeal to the Land Court were as follows:"1.The valuation is excessive and contrary to Law.
2.The site is injuriously effected by adjoining usage.
Insufficient allowance has been made for such usage.
4.The valuation is clearly a percentage increase calculated on sales of unaffected rural Homesites.
5.Percentage increase of subject is 66% whilst that of unaffected properties is only 48% average.
6.The 1986 value used as a base shown as 50,000 dollars did not reflect the reduction to 45,000 by the Court.
7.The valuer has failed to disclose the sales of similarly injuriously effected sites he relies on as required by law.
8.By neglecting to value the adjoining industrial site under section 12(1A) for its highest & best use as required by law. The Valuer General is bestowing financial advantage on the operators, and thereby exacerbating the injurious effection of the subject property."
The other grounds referred to in the Notice of Appeal to the Land Appeal Court are as follows:
"1.The Valuation was made contrary to Law and Statute.
2.The Land Court was misled by Mr Savage regarding the valuing of Lot 2. RP 201675 under s.11(1)(vii).
3.The evidence of Mr Savage as to the improvement to on the following grounds:-
amenity caused by change of use of the sawmill site as on previous occasions is unproven hearsay, and is inadmissible by Law.
4.In his decision Mr White ignores the evidence placed before him that the 1985 valuation decision was obtained by Fraud, and is in law a nullity. He says in fact (Transcript p.170) he is bound by that decision.
5.The decision appealed from is void."
Written notice was given to the parties that the matter was listed "for hearing or otherwise" before the Land Appeal Court on 25 October 1993 (Exhibit 6).
Section 44(13) of the Land Act 1962 provides, in paragraphs relevant to these proceedings:"(13)(a) The appeal shall be by way of a rehearing, and shall be brought and the proceedings shall be had in such manner as may be prescribed by rules of court.
(b) Not later than 7 days before the hearing of an appeal, each party shall notify in writing the other party or parties and the Registrar whether he intends to rely on the record of the Land Court or whether he proposes to adduce further evidence on the appeal.
(c) Where a party proposes to adduce further evidence on the appeal, the notification referred to in paragraph (b) -
(i)shall contain or be accompanied by a brief statement of the nature of that evidence and the names, addresses and occupations of the witnesses through whom it is proposed to adduce it; and
(ii)where that evidence consists of or includes a fresh valuation, shall contain a summary of items constituting the valuation and general particulars of all supporting data.
In a case to which subparagraph (ii) refers, the Land Appeal Court, on the date of the hearing of the appeal, may make an order for mutual exchange in accordance with section 41B(6) and for that purpose that subsection applies with and subject to all necessary adaptations.
(d) Evidence not notified in accordance with paragraph (c) may be adduced at the hearing of the appeal only with the consent of the Land Appeal Court given upon such terms as to costs and adjournments and such conditions as that Court thinks fit."
Pursuant to section 44(13)(b) of the Land Act, the appellants advised the respondent by letter dated 13 October 1993 that further evidence of specified types would be advanced by Mr Stubberfield. The appellants also stated that they required the Valuer-General to "produce for examination at the hearing of appeal
(a) The valuer responsible for the valuation published and ...(b)Mr Malcolm Victor Newing being the person purportedly the source of the evidence related by Valuer Savage," (that is, Mr Ian Geoffrey Savage, a registered valuer employed by the Department of Lands on whose evidence the respondent relied in the Land Court proceedings).
In a letter dated 18 October 1993 (Exhibit 4), the Director of Legal Services in the Department of Lands advised the appellants that:
(a)the respondent intended to object to grounds 2, 3, 4 and 5 of the Notice of Appeal (which he described as new or additional grounds);
(b)the valuer responsible for the valuation published would not be produced but that Mr Savage would be available to give evidence if necessary; and
(c)Mr Newing would not be produced.
On 25 October 1993 the respondent took issue with some of the grounds listed in the Notice of Appeal to the Land Appeal Court and the appellants contended that the Land Appeal Court lacked jurisdiction to hear the appeal. A ruling on the former issue was made by the Court on 25 October 1993. Written reasons for a reserved decision on the latter issue were delivered by the Court on 5 November 1993.
Written notice was given subsequently to the parties that the appeal was listed "for hearing or otherwise" before the Land Appeal Court on 28 March 1994
(Exhibit 5).
In a letter dated 17 March 1994 (Exhibit 7) the Director of Legal Services of the Department of Lands wrote to the appellants pursuant to section 44(13)(b) of the Land Act 1962 advising that "the respondent will not now be calling Mr Ian Geoffrey Savage as witness" and that instead, the respondent's witness would be Mr Andrew Thomas Albiston, a valuer with the Department of Lands. The notice continued:"Mr Albiston has prepared a fresh report and valuation of the subject land in which he has made an independent assessment of the unimproved value of that land, having regard to the sales which were relied upon by the respondent in the Court below and which appear at pages 230 and 231 of the Record, and having regard also to the relativity of the subject valuation with the valuations of some other comparable parcels of land in the vicinity.
Mr Albiston will say that, in his opinion, an unimproved value of $75,000 for the subject land is fair and reasonable as at the Date of Valuation 31 March 1988.
The earlier advice contained in my letter dated 7 October 1993 is withdrawn."
There was no dispute that the notice was given to the appellants not later than 7
days before 28 March 1994.
Against that factual and legislative background we can make or record rulings made about the four preliminary issues.
(a) Grounds of appeal
Before the Land Appeal Court on 25 October 1993, the respondent took issue with the grounds 2, 3, 4 and 5 of appeal said to be additional to those grounds listed in the Notice of Appeal to the Land Court. The Land Appeal Court was constituted on that occasion by Mr Justice Lee, Mr Wenck and Mr Neate. The Court noted previous decisions of the Land Appeal Court which make it clear that additional grounds may not be taken in the Land Appeal Court to those grounds in the Land Court. The Court concluded that, in substance, the grounds 2, 3, 4 and 5 are merely another way of saying that evidence adduced before the Land Court was incorrect and so provided an incorrect basis for assessing the grounds of appeal taken by the appellant to that Court. The Land Appeal Court did not regard grounds 2, 3, 4 and 5 as in truth new grounds of appeal. As the Court pointed out, the appellants were entitled to adduce evidence before the Land Appeal Court either by themselves or their witnesses, or by cross-examining the respondent's witnesses to establish a factual foundation to make out the appellants' original grounds of appeal to that Court. In effect, the practical result is the same. The appellants are not prejudiced. They are confined to the original grounds of appeal and can adduce appropriate evidence. Accordingly, the Land Appeal Court did not strike out grounds 2, 3, 4 and 5 but simply disregarded them as grounds of appeal.
On that occasion, Mr Stubberfield stated that the "prime point" or "cardinal point" is "the injurious affection and the allowance for it of the operations on the land adjacent to us on the north side".
Although the additional grounds referred to in the Notice of Appeal to the Land Appeal Court were not struck out, it is clear that, for reasons which will become apparent later in this judgment, the additional grounds numbered 2-4 inclusive were not relevant to the appeal as finally argued before this Court.
(b) When the hearing of the appeal commenced
Earlier in these reasons we quoted section 44(13)(b) of the Land Act 1962 which provides that, not later than 7 days before the "hearing of an appeal", each party shall notify in writing each other party and the Registrar whether the party either intends to rely on the record of the Land Court or proposes to adduce further evidence.
The appellants contended before this Court on 28 March 1994 that the "hearing" of their appeal commenced on 25 October 1993 and hence the notice (dated 17 March 1994) that Mr Albiston would give evidence was not made "not less than 7 days before the hearing" of the appeal.
To resolve that issue we had to characterise what took place before the Land Appeal Court when the matter was called on 25 October 1993. On that occasion, the respondent took issue with certain grounds of appeal and the appellants raised as a "preliminary issue" a contention that the Court lacked jurisdiction to hear the appeal. In written reasons delivered on 5 November 1993, that question was decided against the appellants. At no stage in the proceedings on 25 October 1993 did the Court or the parties deal with the substantive matters of the appeal. Therefore the Court, on that date, did not embark on the "hearing" of the appeal.
By a notice made pursuant to section 44(13)(b) of the Land Act 1962 and dated 17 March 1994, the respondent gave notice to the appellants of an intention to support the valuation by the evidence of a different valuer, Mr Albiston, and not to call Mr Savage. As we stated in the course of the proceedings on 28 March 1994, we inclined to the view that the intention to call Mr Albiston was, in the circumstances, notified not less than seven days before the "hearing" of the appeal within the meaning of that expression in section 44(13)(b). But if we were wrong about that, we considered that we ought to consent to the respondent being permitted to adduce the evidence of Mr Albiston pursuant to section 44(13)(d). Sufficient notice was given to the appellants of the intention to call him, and it was not suggested that the notice lacked the information required by section 44(13)(c). Mr Albiston's opinion of the unimproved value is the same in amount ($75,000) as was Mr Savage's estimate, and it was based on evidence of sales previously considered during the course of the hearing in the Land Court. In short, no substantial prejudice was established and, if it was necessary to do so, we exercised our discretion to consent to the course proposed by the notice given to the appellants.
As well as taking issue with the timing of Mr Albiston's report, the appellants submitted that the report was inadmissible in these proceedings. The appellants contended that the report constituted a different valuation from that which gave rise to the proceedings before the Land Court and, consequently, it should be rejected by this Court. In their submission, the respondent could only issue a fresh valuation pursuant to section 13(2) of the Valuation of Land Act 1944.
The respondent contended that the report prepared by Mr Albiston was not a valuation to which section 13 of the Valuation of Land Act applied because the amount of the valuation was the same as the amount which the Valuer-General originally determined. Rather, the report was a fresh valuation only in the sense contemplated by section 44(13)(c)(ii) of the Land Act 1962 and was no more than a valuation report by a different valuer supporting the valuation in issue at all material times.
Reference was made to the decision in Kilcoy Shire Council v Brisbane City Council ((1971) 124 CLR 60) where the High Court considered the various meanings of the term "valuation" as used in the Valuation of Land Act 1944. Barwick CJ, in effect, decided that the word "valuation" is used in the Act in shifting senses. Where, for example, the Act required the Valuer-General to "make a valuation of the unimproved value of" parcels of land, the word "valuation" covers both the activity of assessing value and the reduction of that assessment to written form. When an operative date has been fixed, and the assessment may be acted upon, the activity of the Valuer-General became "the valuation" ((1971) 124 CLR at 67). Windeyer J, who agreed with the reasons of Barwick CJ, described "the valuation" as being "the contents of the document which embodies the assessment of value" ((1971) 124 CLR at 72).
For the purposes of this case, the use of the word "valuation" in sections such as 13(7), 16G, 16J and 21 of the Valuation of Land Act 1944 was relevant. (Those sections have since been renumbered and the Act was reprinted in its amended form in 1994.) Section 13(7) provided that any and every valuation, or alteration of the valuation of any land made, or purporting to be made under the Act by the Valuer-General was deemed to be correct until proved otherwise or altered according to law. Section 16G enabled an owner who was dissatisfied with "the valuation" of his land made by the Valuer-General to object to the Valuer-General. Section 16J provided that an owner who had objected against "a valuation" could, if dissatisfied with the decision on objection, appeal to the Land Court against "the valuation". Section 21(3) required the appellant to specify in the notice of appeal the amount which, in the opinion of the appellant, should be "the valuation" of the subject land. In Brisbane City Council v Valuer-General, Gibbs J accepted that the term "valuation" as used in section 13(7) of the Act "at least includes the amount of the valuation" ((1978) 140 CLR 41 at 56).
In our view the "valuation" for the purposes of these proceedings is the amount determined by the Valuer-General as being the unimproved value of the subject land as at the relevant date of valuation and which was affirmed in the Valuer-General's notice of decision on objection issued on 31 July 1989. Accordingly, we can see no basis for rejecting as inadmissible the report prepared by Mr Albiston.
(c) The burden of proof
Section 21 of the Valuation of Land Act 1944 (as it was at the relevant date of valuation) empowered an owner of land who was aggrieved with the decision of the Land Court to appeal to the Land Appeal Court. Section 21(5) provided that "such an appeal shall be by way of a rehearing". Similarly, section 44(13)(a) of the Land Act 1962 provides that an appeal to the Land Appeal Court "shall be by way of a rehearing".
Section 16J(3) of the Valuation of Land Act provided that a Notice of Appeal "shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner." Because an appeal to the Land Appeal Court is by way of a rehearing, the burden of proof is borne by the appellants in these proceedings.
Section 13(7) of the Act provided, in terms relevant to these proceedings:
"Any and every valuation ... of any land made ... under this Act by the Valuer-General shall be deemed to be correct until proved otherwise upon objection or appeal ...".
In Brisbane City Council v Valuer-General, Gibbs J (with whom Stephen, Mason, Murphy and Aickin JJ agreed) accepted that "there is a presumption that the value in money terms shown by the Valuer-General in his notice of valuations is correct" ((1978) 140 CLR 41 at 56). His Honour continued:
"The question then is whether a court on appeal is bound to accept the Valuer-General's figure as correct unless it is positively established that the true value is lower, or whether it is enough to show that the value was reached as the result of an error in principle. In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s.13(7) is rebutted. ...
In my opinion once it is shown that a valuation was made by a method fundamentally erroneous the presumption is rebutted." (at 56, 57).
Having considered section 21 of the Valuation of Land Act, Gibbs J stated:
"The effect of these provisions is that an owner on appeal to the Land Appeal Court has the burden of proving the grounds of his appeal, but not the burden of proving that the amount which in his opinion should be the valuation is correct. Obviously the Court, if it allows an appeal, may determine the valuation at an amount different from that for which the owner contends." (at 57).
Mr Stubberfield accepted that the appellants bore the onus of proving that the Valuer-General's determination of the unimproved value of the subject land at the relevant date of valuation was incorrect. The appellants, however, appeared to be under the misapprehension that, in order to succeed in their appeal to this Court, they had to prove that relevant findings of fact on which the Land Court's decision was made were incorrect. In particular, the appellants felt under some obligation to attempt to disprove certain assertions made and factual evidence given by Mr Savage, on which, it was said, the learned Member relied in reaching the decision under appeal.
It was apparent from the way in which the respondent approached these proceedings that the appellants were under no such obligation. As we noted earlier, the appellants were advised in writing that the respondent would not be calling Mr Savage as a witness but would be calling Mr Albiston, who had prepared a "fresh report and valuation". At the first day of the hearing of these proceedings, Mr Paterson for the respondent reiterated that the respondent would not be calling Mr Savage as a witness and would not be relying on evidence given by Mr Savage in the Land Court. Rather, Mr Paterson said, the respondent would be "relying solely on the evidence to be given by Mr Albiston". The respondent's case was that the Valuer-General's valuation of the land could be defended entirely on the basis of Mr Albiston's report.
Consequently, in order to succeed in this appeal, it was neither necessary nor relevant for the appellants to rebut or even refer to evidence given by Mr Savage to the Land Court or to disprove any findings of fact made by the Land Court in reliance on that evidence.
The appellants also sought to rely on the decision of the Full Court in Stubberfield v. The Valuer-General ((1988-89) 12 QLCR 328) to establish that the Valuer-General bore the onus of supporting the valuation. In their submission, the onus had shifted from them because the Full Court had held that, at the relevant time, the Valuer-General was making valuations that were not in accordance with the statutory requirements. It was submitted that, because the valuations were invalid in that case and the same procedure operated in the present case, the subject valuation was invalid. In particular, the appellants submitted, the Full Court found that the Valuer-General was "producing a flat rate of valuation for taxing purposes" and, in the present case, that was evident from the Valuer-General's "disregard" of detriment to the land.
In our view, the submission was flawed in two respects. First, the Full Court decided that, in determining the unimproved value of land, consideration should be given to any officially advertised intention to rezone land for the purpose of ascertaining whether the intention to rezone would affect the value of the land in the mind of the hypothetical purchaser. That decision has no relevance to this case.
Two general statements from the reasons for decision may be thought to be applicable to the real issue in this case (though they do not advance the appellants' arguments on this preliminary issue). Carter J wrote:"If there are relevant facts and circumstances, whether they relate to town planning matters or otherwise, which affect an individual parcel of land which should be reflected in its value it is beside the point that those facts and circumstances require that a parcel of land be valued `in isolation and independent of other parcels'. To reject the relevant facts applicable to a particular parcel in the interests of so-called equitable relativity is to determine a value which does not accord with the statutory definition of `unimproved value'." (at 339-40)
Moynihan J also expressed the view that
"if facts are established which could affect the price a hypothetical prudent purchaser was prepared to pay for a particular piece of land by comparison to other lands of `similar zonings, uses or categories' not so affected then, in the absence of some statutory provision compelling exclusion of the consideration, the valuation of the particular piece of land should reflect the considerations peculiar to it." (at 347)
Secondly, there was no evidence that the Valuer-General disregarded the detrimental effect of the adjacent nuisance on the unimproved value of the subject land. Indeed, it was manifest from Mr Albiston's evidence and from the relative valuations of the neighbouring properties that the detrimental effect was considered. The real issue is whether adequate allowance was made for the detriment from that nuisance.
(d) The evidence in these proceedings
When he was first asked by this Court to specify the evidence on which the appellants would rely, Mr Stubberfield said he would be unable to do so. He then stated that "any new evidence is contained in the affidavit" that is, Exhibit 8. When asked what evidence given to the Land Court would be relied on by the appellants, Mr Stubberfield specified only the evidence adduced on behalf of the appellants. It is useful to set out the context in which that statement was made:
"HIS HONOUR: It will be necessary for you to identify and clearly the evidence upon which you wish to rely before this Court.
MR STUBBERFIELD: I'll do that as I go through it Your Honour, what's wrong with that?
HIS HONOUR: It will be necessary to do it at the outset. If you tell us, for example, that you rely on the whole of the evidence which you gave which is recorded in the appeal book as well as your affidavit then we will know what is before us in your case.
MR STUBBERFIELD: I thought I'd made that clear Your Honour. We do rely on the evidence that we gave. The evidence that was adduced on our behalf in the Land Court we rely on.
HIS HONOUR: You rely on all of that.
MR STUBBERFIELD: We rely on all of that, all of that evidence. Some of it we may not need, but I can't go through it and itemise what we need and what we don't need. ...." (Transcript p.19.)
The following exchange took place a little later in the proceedings:
"HIS HONOUR: What we intend to do on this occasion is this, to be told what evidence it is that you rely on before us and I think we all understand that now. It consists and consists only of the affidavit which you've placed before us today as Exhibit 8 and the evidence adduced on behalf of yourself and your wife in the hearing in the Land Court, isn't that so?
MR STUBBERFIELD: Yes Your Honour, I think so."
(Transcript p.20, see also pp.23, 24-5, 26, 27, 28, 44-5, 60-2.)
In the course of his final oral and written submissions, Mr Stubberfield sought to refer to evidence given by Mr Savage to the Land Court. Before that point in the proceedings, the appellants had not relied on any of the evidence given by Mr Savage to the Land Court in the matter AV89-508, nor had the respondent relied in any way on that evidence. Accordingly, this Court ruled that the appellants were excluded from seeking to make use of that evidence as part of their case in these proceedings. As was pointed out to the appellants, the fact that they had prepared a case which, to a large extent, comprised a rebuttal of the respondent's case in the Land Court (which case depended on the evidence of Mr Savage), could not determine the course of proceedings before this Court. The respondent had chosen not to rely on evidence given by Mr Savage and had not called him in these proceedings. The appellants had clearly confined themselves to evidence produced before this Court and to those parts of the evidence in the Land Court produced by them or on their behalf.
The documentary evidence before this Court comprised the Notice of Appeal (Exhibit 1), the record of proceedings before the Land Court (Exhibit 2), correspondence between the parties prepared pursuant to section 44(13) of the Land Act 1962 (Exhibits 4, 7, 17, 18), Court Notices advising of the dates "for the hearing or otherwise" of the appeal (Exhibits 5, 6), an affidavit prepared by Mr Stubberfield (Exhibit 8), an aerial photograph, dated 17.5.1980, of the subject land and neighbouring blocks (Exhibit 9), a folder of photographs of the subject land and the neighbouring northern site, taken in the period from 1981-1991 (Exhibit 10), a plan showing, among other things, the location of a block of land facing Gympie Road (Exhibit 11), a certificate from Queensland Transport concerning possible road requirements for part of the block of land facing Gympie Road (Exhibit 12), an extract from the transcript of the proceeding before the Land Appeal Court in Stubberfield v The Valuer-General V87-374 (Exhibit 15), a chronology of events relating to the valuation of the subject land as at 31 March, 1988, (Exhibit 16), graphs G5 and G6, to replace two graphs in Exhibit 8 (Exhibit 19), and the valuation report prepared by Mr Albiston (Exhibit 20). For convenience, the final written submissions of the respondent and the appellants were marked Exhibits 21 and 22 respectively.
Provisionally admitted were a memorandum dated 6 August 1962 prepared by the Department of Planning and Building, Brisbane City Council, concerning an application by C J K and D M Smith to erect a building on land in Lacey Road Aspley for the purpose of a saw and case mill (Exhibit 13), and an extract from the transcript of the proceeding before the Land Court in Stubberfield v The Valuer-General AV89-32, on 27 April, 1989 (Exhibit 14). As will be apparent later in these reasons, the documents were not relevant to the resolution of the issues in this case. They must be disregarded and we hold that they are inadmissible.
Oral evidence was given by Mr Albiston.
As the appellants relied on evidence given to the Land Court by them or on their behalf, it is necessary to consider the relevant parts of the transcript of the proceedings in the Land Court and the documents tendered by the claimants, which are set out in Exhibit 2.
The substantive issues
In light of the observations and rulings just made, it is clear that this case must be decided in accordance with the usual principles. In particular, this Court must determine whether the appellants have shown that the unimproved value of the subject land at the relevant date of valuation was other than the amount of $75,000 determined by the Valuer-General.
Section 12(1)(b) of the Act defined "unimproved value" in relation to improved land as -"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".
It has been observed by the Land Court, the Land Appeal Court and other courts dealing with valuation matters that the best guide to arriving at unimproved value is provided by sales of vacant or lightly improved parcels of land which are comparable in quality and situation to the subject land (see for example, PH Clough v The Valuer-General (1981-82) 8 QLCR 70 at 76, Land Appeal Court; R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13 at 17, Land Appeal Court; and BG and AK Wilson v The Chief Executive, Department of Lands AV91-671 17 February 1994 - Land Appeal Court (not reported) at pp. 12-13 of the judgment).
An issue which often arises when considering sales evidence is whether the sales on which either party relies are truly comparable to the subject land.
In these proceedings, the appellants placed much reliance on the statement by the Land Appeal Court in Re: Appeals by landholders against determinations of the Valuer-General - Shire of Monto that if the value of the land cannot be established by sales of properties "similar or comparable in all relevant aspects to the subject land, a previous relativity may provide a guide" ((1984-5) 10 QLCR 32 at 39). We do not consider that that statement means that unless a sale is virtually identical to the subject land it must be disregarded as a basis for determining the unimproved value of the subject land.
The appropriate approach to be taken to the use of comparable sales was discussed by Wells J in Brewarrana Pty Ltd v Commissioner of Highways, SA in the following terms:
"It is general valuation practice for sales characterized as comparable sales to be used as bases for the valuation of lands said to be similar. But allowances must always be made before such sales can be so used. No two parcels of land are identical in all respects: the sale price of any given piece of land is not necessarily the price at which it ought to have been sold, or the same thing as its true value. Before using any allegedly comparable sale, therefore, the valuer must consider whether, having regard to the circumstances (using that word in its broadest sense) appertaining to the parcel of land in question, and to the transaction of sale, there are sufficient similarities to the circumstances appertaining to the subject land and to the notional sale presupposed by the test formulated in Spencer v The Commonwealth of Australia and in later cases to warrant a court's reasoning from the sale price paid under the allegedly comparable sale, with or without other evidence, to a value for the subject land. Adjustments must, of course, be made every time reasoning of that kind is undertaken. For example, in relation to the land itself and the circumstances appertaining to it, it may be necessary to consider such matters as topography, location, size, shape, slope, view, land use (actual and potential), scope for, and difficulties of, development, services and amenities; and in relation to the transaction of sale, the valuer must weigh such things as the character, business and relationships of the parties, their motives, the terms and conditions in their contract of sale and any other special considerations that induced or may have induced them to conclude the contract at the selling price agreed, as well as the dates when the contract of sale and transfer were concluded or effected. ... there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. It is, in my view, all a matter of degree: some adjustment is always necessary; too much adjustment will render it unsafe to use a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method. Just where the line is to be drawn is, it seems to me, the very sort of question that is fit for the expert valuer to determine; the assessment of the risks of adjustment is peculiarly within his sphere of skill." ((1973) 25 The Valuer at p. 331, 6 SASR at pp. 550-1)
It is necessary to consider the evidence brought for the respondent with those principles and qualifications in mind. If those sales lands are not sufficiently comparable to the subject land or are inapplicable for any other reason, then that evidence provides no acceptable valuation basis. Regard may then be had to the valuation which might be found for the subject land by considering its reasonable relativity with valuations applied to other comparable lands in the neighbourhood.
(a) Sales Evidence
According to the report prepared by Mr Albiston, an unimproved valuation of the land in the amount of $75,000 was supported by the following sales evidence:Sale 1:17 Cowie Road. The land is a rectangular block with an area of 1.012 hectares, the western boundary of which is the eastern boundary of the subject land. It has frontage to Cowie Road and is zoned "Future Urban", as is the subject land, and was sold in December 1987 for $110,000. The sale was analysed to show an unimproved value of $108,000. The unimproved value applied to the land as at the relevant date of valuation was, however, $92,000. The sale land is the same size as the subject. It backs onto the subject land and is opposite a poultry abattoir. Similar services are available. It had previously been sold in January 1987, approximately 10 months before the relevant date, for $75,000. Mr Albiston described the sale land as "overall superior to subject". In the Land Court proceedings, Mr G D Brett (a registered valuer who gave evidence for the appellants) described the sale land as a "far better block of land" in a "far better street" than the subject land. In his opinion, the brick home built towards the rear of the timber yard block provides a buffer between the timber yard and the sale land so that the location of the timber yard would have little if any effect on the unimproved value of the sale land. He noted that the sale land is next to a block on which a high-class residential house is built. Although the land is opposite a poultry abattoir, the abattoir is separated from the land by a road (rather than along a side boundary) and is "not the eyesore that the timber yard is". He recognised that there is some street traffic, and some vehicular traffic in and out of the poultry abattoir site, and that odours emanate from that site. A house has now been built well back on the sale land, minimising the effect of that detriment and maximising the use of the space on the land (though taking it closer to the subject land and the timber yard which is visible from the sale land).
Sale 2: This is another property in Cowie Road, being a hatchet shaped block with an area of 2,293 sq. metres. It is zoned "Residential A" and was sold in December 1987 for $75,000. Mr Albiston analysed the sale to show an unimproved value of $74,000. The valuation applied by the Valuer-General at the relevant date was $67,000. The sale land is less than one-quarter of the area of the subject land. It is elevated but with no views or aspect. Water and sewerage are available to the site. Mr Albiston described the block as "overall inferior to subject".
Sale 3: Beams Road. The sale block has an area of 2,455 sq. metres. It is zoned "Residential A" and was sold in June 1987 for $92,000. Mr Albiston analysed the sale to show an unimproved value of $89,500. The valuation applied by the Valuer-General at the relevant date was $82,500. The block is also less than one-quarter of the area of the subject land. It fronts a busier road than does the subject with considerable traffic noise from Beams Road. There are traffic-generated problems of access to the site which is elevated with limited views. Water and sewerage are available. Mr Albiston described the sale land as "overall superior to subject".
Sale 4: Beams Road. This block has an area of 4,357 sq. metres and is also zoned "Residential A". It was sold in April 1988 for $160,000. Mr Albiston analysed the sale to show an unimproved value of $158,000. The valuation applied by the Valuer General at the relevant date was $127,000. The land has an area of approximately 43 per cent of the area of the subject land. It suffers similar disabilities from its Beams Road location as does Sale 3. The block is elevated with some views. Water and sewerage services are available. Mr Albiston described the block as "overall superior to subject".
At the conclusion of the evidence and submissions, the Court inspected those properties, the subject land and other blocks to which the appellants referred in their submissions.
The appellants relied on the valuation evidence provided by them, or called on their behalf through Mr Brett in the proceedings before the Land Court. No sales evidence was produced by Mr Brett. His verbal opinion was that the unimproved value of the subject land at the relevant date was $50,000. That opinion was based on relativity issues, rather than sales evidence, and on information provided to him by the appellants.
It is apparent that the best available evidence was the sale of the similarly zoned site of similar area adjoining the subject land to the east, or rear (Mr Albiston's Sale 1). In comparison with the subject, the sale land has more desirable, but not significantly superior, physical characteristics. It fronts a street with significantly less traffic noise and generally superior quality residential development. It would suffer some disability from the use of the land adjoining the subject (on which is the sawmill) but not the direct exposure or disability suffered by the subject land. The sale land is situated directly opposite a poultry abattoir which has an obvious deleterious effect on the desirability of the land for use as a rural residential homesite. Nevertheless it has attracted an above-average quality dwelling. That land sold in December 1987 for $110,000. The sale was analysed by Mr Albiston to show an unimproved land value of $108,000.
The valuation applied by the Valuer-General to the sale land as at the same relevant date, was $92,000. Mr Albiston saw that application as being "conservative". We would go further and say it seems that the sale was not used as a basis for the much lower valuation of $92,000 applied to that land as at the relevant date.
The three other sales put forward by Mr Albiston as a basis of valuation were of "Residential A" zoned sites, much smaller in area than is the subject land. Although Sales 3 and 4 were of land affected by the nuisance of traffic noise and access disabilities, we are unable to gain any assistance from these three sales of land, as cogent comparison with the subject land is, at best, difficult.
(b) Relativity
When considering the unimproved value of the subject land relative to the valuations applied to nearby comparable blocks, the issue is what amount should be deducted to account for the presence of the timber yard on the adjoining Lot 12. We accept for this purpose that the timber yard existed at the relevant date of valuation and that the use of the land for that and associated purposes was a lawful, if non-conforming, use.
Before reaching an answer, it is necessary to establish what activities were conducted on Lot 12 at and about 31 March, 1988.
In evidence given to the Land Court, Mr Brett said that the land adjacent to the subject land was used as a timber yard at which sawn timber and such things as roof trusses and house frames were sold. He understood that activities involving heavy plant and sawing were not carried out on the land. It was used only for retail sales purposes, although it was possible that some minor manufacturing (such as making trusses) was carried out at the relevant time. He expressly stated that there was no activity producing "the real high-pitched, dreadful noises" from the milling of logs. He described the detrimental effect of the timber yard block on the subject land as "very severe" and "very serious" and described the timber yard as "very unsightly" and "an eyesore". In Mr Brett's opinion, there would be a drop of 30 per cent in the value of the subject land attributable to the effect of the timber yard next door.
For the purpose of preparing his valuation report, Mr Albiston interviewed Mr M V Newing (a part owner of Lot 12 and of the sawmill). Apparently, Mr Newing informed him that the "sawmill" was operating for three and four hours each day at the date of valuation. Occasionally a semi-trailer would be used to carry logs onto the property and a truck departed every day with timber. The "sawmilling" was mainly concerned with the re-milling of oregon flitches (lengths of timber cut from a log). In 1988 the main enterprise was case making, although there may also have been some truss manufacturing.
According to Mr Stubberfield there were three businesses on the site at the relevant date of valuation, namely, a timber yard, a mill and a manufacturing enterprise. Mr Stubberfield tendered an affidavit sworn on 2 June 1992 by Mr Newing. The affidavit was prepared in connection with proceedings before the Planning and Environment Court. Mr Newing stated that when he and others purchased the land and business in 1981 the business consisted of a sawmill and timber yard. A "considerable part" of the business then consisted of the cutting of logs. Some of the timber was dried and resold to customers while some of the timber was used for fabrication of timber products, mostly to make timber packing cases. By 1992 the business conducted on the land was "still the business of a sawmill and a timber yard". In the part of the business involving the fabrication of timber products the emphasis was on the fabrication of roof trusses and lattice panels rather than on cases. Although the operators "do not often mill large logs", most of the timber arrives as flitches which "are cut down into popular sizes for resale or use". The milling of such flitches is usually done for about five hours of each working day.
We are satisfied that at the date of valuation some sawmilling was taking place regularly and for substantial periods on Lot 12. Mr Albiston heard a demonstration of the sawmilling of timber and described the noise of the saw as "high pitched and obtrusive". In his opinion, it was not a matter of how much noise a saw makes. Rather the question was how much the value of the land would be affected because sawmills make "plenty" of noise and are "messy" and "unattractive".
Although Mr Stubberfield informed this Court that the sawmill ceased to operate in December 1992, we note that before the Land Court he seemed to be at pains to understate the significance of the noise of saws as a source of the detriment, preferring to stress other factors. Indeed he suggested that neither the learned former President nor the Land Appeal Court in previous cases had been influenced substantially by the detriment occasioned by the noise from the saws. We cannot agree.
In Stubberfield v The Valuer-General (V82-5, decision dated 1 September 1982), the learned former President, Mr Smith, allowed the appeal and reduced the amount of the unimproved value of the subject land from $27,500 to $19,000. In his reasons for decision, the President wrote:"The appellants, not unnaturally, regard the sawmill as a blot on the landscape. They complain of its visual and audible pollution. The sawmill area is untidy, toilet facilities are minimal, dust rises from the unsealed driveways and in particular the sawmill and a storage shed used for moulding machines are open, facing the length of the appellants' land and giving an amplification effect to noise levels. It is claimed that the mill operates five and a half days per week. It is further claimed that all improvements on the sawmill site are within 150 yards of the subject parcel."
The President continued:
"I took the opportunity of visiting the subject locality and observing the sawmill and the subject land. I agree with the appellants that the sawmill operation is not conducive to peaceful, rural residential living and would be a matter which would adversely affect the value of their property on the market. In the absence of sales of properties adjacent to noisy industrial sites the allowance which should be made is to an extent personal and subjective."
In Stubberfield v The Valuer-General (V87-374, decision dated 22 July 1988) the Land Appeal Court noted that the adjoining land was developed and used as a timber yard site. The Court (which included Mr Smith) observed that the -
"resultant noise nuisance for the occupiers of the home on the subject land and its detrimental effect on its unimproved value is the essential issue in this appeal.
The fact that the noise level from the operation of the mill is a disability for the subject land was canvassed extensively before the Land Court, and was of sufficient moment to convince the learned Member below to find that ... he was prepared to `resolve the shade of doubt he had in favour of the appellants by determining the value of the land in the sum of $45,000'. The record of proceedings in the Land Court is before us and its content amply illustrates how comprehensively this matter was canvassed."
The Land Appeal Court noted that it was "an essential element" of the appellants' case that the Court should reduce the valuation under appeal by the same proportion as did the learned President in the case previously cited. The Court noted that relativities between properties or parts of shires may vary from valuation period to valuation period and that what has to be determined is the unimproved value of each parcel of land at the relevant date. The Court expressly stated that it was "not influenced in this judgment by the 1982 decision of the learned President, either as to quantum or unimproved value or as to an appropriate allowance for the noise disability".
In the present case the appellants relied again on the decision in Stubberfield v The Valuer-General (V82-5, decision dated 1 September 1982). The appellants submitted that if the relativity between the valuation of the subject land as determined by the Land Court and the valuation of neighbouring blocks had been retained as at 31 March, 1988, then the present litigation would have been unnecessary. Indeed, Mr Stubberfield agreed that the appellants' case was basically that the same allowance should have been made as at 31 March, 1988 as was made for the 1979 valuation. In his submission, the relativity of values (or the allowance for detriment) set by that decision should remain "until change is demonstrated by sales comparable in all relevant aspects".
We have given due weight to the findings of fact and the decisions made by both Mr Smith and the Land Appeal Court. We have also borne in mind the cautionary comment of the present Chief Justice of the High Court of Australia that:
"too much attention is given both by valuers and judges to what has been said by courts in other cases on matters of fact and discretionary judgment, not being matters of law. Essentially valuations are estimations involving findings of fact and discretionary judgment made on the evidence given in the individual case and by reference to the circumstances of that case. To apply slavishly the approach taken by a judge in another case ... is to attribute to them the force that should be confined to propositions of the law." (Federal Commissioner of Taxation v St Helens Farm (Act) Pty Ltd (1981) 146 CLR 336 at 383.)
The facts on which the previous appeals against valuation were determined are similar, though not necessarily identical, to the facts in this case. Clearly the location and features of the subject land in its unimproved state do not change from year to year. Relevant features on neighbouring blocks, however, may change. The nature and extent of the use of Lot 12 has apparently varied from year to year. For example, there was evidence in these proceedings, though not relevant to the result in this case, that the sawmilling stopped in recent years. If prestigious dwellings were to be built on adjacent land, or if the land on the opposite side of Lacey Road were to be developed, or if the road itself were to be widened and upgraded, or if sewerage were to be available to the subject land, those factors would have to be taken into account in determining the unimproved value of the subject land at the relevant date. Accordingly, it is necessary to make a determination in this case mindful of what has gone before but based on the evidence properly tendered and proved in the present proceedings.
The valuations at the relevant date of neighbouring blocks in Lacey Road with the same size and shape were Lot 9 ($90,000), Lot 10 ($89,000), Lot 11 - subject ($75,000), Lot 12 - timber yard ($96,000), Lot 13 ($73,500) and Lot 14 ($77,500).
Mr Brett considered that a valuation of $89,000 for Lot 10 was compatible with the price paid for the Sale 1 land in December 1987. [Exhibit 2, pp.54-5.] In his opinion, if Lot 10 was valued at $89,000 and if there was no timber yard on Lot 12, the subject land (Lot 11) would be valued at about $70,000. Deducting 30 per cent from that amount would mean that the unimproved value of the subject land with the timber yard in place would be $49,000, say $50,000. He assigned the difference in value between the adjoining Lots 10 and 11 to the slightly higher elevation of Lot 10 and the better contour and drainage of that block.
In the Land Court proceedings, Mr Stubberfield estimated that, if there had been no timber mill on the adjoining land, the unimproved value of the subject land at the relevant date of valuation would have been between $60,000 and $65,000. Before this Court, however, he submitted such value to have been about $85,000. He further submitted that the detriment had increased rather than decreased. He took off 36 per cent for the effect of the timber mill to suggest a valuation of $54,400.
Mr Albiston estimated that, in the absence of the timber mill, the unimproved value of the subject land would have been about or a little higher than $90,000. Mr Albiston was not concerned with the position which existed in 1979 or at any time other than the date relevant to this matter. He accepted that the subject land would have been perceived in the market, at that date, as being adjacent to a property used for sawmilling and associated operations, using the visually unattractive infrastructure, and machinery normally associated with such a business. As we understood his evidence, he would expect a prudent purchaser to envisage the potential use of the adjoining property as embracing the full spectrum indicated by the existing infrastructure. On that basis he says, in comparison with an unaffected valuation of "$90,000 plus", a valuation on the injuriously affected basis of $75,000 is fair and reasonable.
Mr Albiston also expressed the view that the sawmill would have some effect on the values of other blocks near to the subject land. In his opinion, the sound of the saws would have "a far greater effect on the subject land than they would on the adjoining land", because the saws were located very close to the subject land with an open bay which would tend to amplify the sound directly onto the subject. The effect of the sawmill would "dissipate very quickly" for blocks in Lacey Road to the south towards Beams Road, and the effect of the sawmill on the Sale 1 land would be "far lesser than the subject".
Conclusion
We have come to the conclusion that, while the level of values applied to other lands in the locality might well be conservative based on the sales evidence, those valuations have not been shown to be fundamentally wrong. As did the Land Appeal Court in Cairns Resort Investment Pty Ltd v The Chief Executive, Department of Lands in a judgment delivered on 31st August, 1993 (not yet reported), we find in such circumstances as relate to this matter that the question of relativity between valuations becomes the primary issue.
The appellants endeavoured to compare the subject land with lands in other localities. In our view, different forces (such as perception of address) affect market values in those localities. Consequently we do not accept that approach to relativity. Where there is no evidence to quantify the effects of injurious affection caused by a specific nuisance, it may be of some assistance for an expert to consider the degree of injurious affection caused by some other nuisance, e.g., the effect of heavy traffic on an adjacent road carriageway; visual pollution; offensive odours etc. There was an attempt to do that here by Mr Albiston, but not from the point of consideration of degree of effect. Rather the point is made that his Sale 1 land is affected by the poultry abattoir opposite and, without doubt to a far lesser degree, by the sawmill next to the subject property. No opinion was provided as to the degree of those effects on value by comparison with the market for a comparable but unaffected site. Sales 3 and 4 are affected by the intensity of traffic, causing noise, fumes, dust and access disabilities, but again there was no opinion as to the degree by which the injurious affection has affected market value.
We have found Mr Albiston's valuation evidence to be of assistance. He has clearly given consideration to the existence and potential effect of the nuisance. The question of degree is one of subjectivity. It is unfortunate that, when the opportunity may have been available, to analyse, even if not in finite terms, the degree of injurious affection caused by other elements of nuisance on sale properties, such research was not undertaken. Nevertheless, in his considerations, Mr Albiston has recognised that several of the sales which he says he used as a basis of valuation were blighted by nuisance, albeit of a different nature.
We are inclined to the view that, while Mr Albiston relied on sales evidence, his opinion as to the amount of the valuation had been heavily influenced by matters of relativity. We are not confident however that his stated opinion as to the relative value of the subject land, had it not been injuriously affected, was not somewhat optimistic. In saying this we are guided by the examples of valuations of neighbouring properties provided as part of his tendered evidence. If his opinion as to an "unaffected" value of $90,000 (plus) was too high on a relativity basis, then it follows that his valuation of the land, as affected by the nuisance, might also be too high.
Finding
While we find Mr Albiston's overall evidence as to matters of value to be more convincing than that of Mr Brett and the somewhat theoretical approaches influencing the opinion of the appellants, sufficient doubt has been created by the appellants as to the correctness of a valuation of $75,000, based on the issue of relativity. On the basis of the evidence before us, we have decided that the valuation of the subject land as at 31st March, 1988, should be determined in the amount of Seventy Thousand Dollars ($70,000).
The appeal is allowed and the determination of the Land Court set aside accordingly.
(Byrne J)
Justice of the Supreme Court.(Mr R E Wenck)
Member of the Land Court.
(Mr G J Neate)
Member of the Land Court.
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