Symes v Department of Natural Resources and Mines
[2005] QLC 24
•29 April 2005
LAND COURT OF QUEENSLAND
CITATION: Symes & Ors v Department of Natural Resources and Mines [2005] QLC 0024 PARTIES: William V and Shirley M Symes, Peter T and Lenore A Johnstone, John L and Veana E Webb
(appellants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NOS: AV2003/0823 and AV2003/0824 DIVISION: Land Court of Queensland PROCEEDING: Appeals against Interim Valuations DELIVERED ON: 29 April 2005 DELIVERED AT: Brisbane HEARD AT: Charters Towers MEMBER: Mr JJ Trickett, President ORDERS: 1. In the case of AV2003/0823, the appeal is dismissed and the interim valuation of the respondent as at 1 October 2001 of Thirteen Thousand Six Hundred Dollars ($13,600) is affirmed.
2. In the case of AV2003/0824, the appeal is dismissed and the interim valuation of the respondent as at 1 October 2001 of Fifteen Thousand Eight Hundred Dollars ($15,800) is affirmed.
CATCHWORDS: Unimproved Value - Large parcel of land improved with a single dwelling house and a duplex - Valuation as separate parcels - Power to declare separate parcels - Power vested in Chief Executive delegated to valuer - Sections 2, 34 and 35 Valuation of Land Act 1944
Unimproved Value - Unimproved value of improved land - Factors affecting valuations - Valuation of smaller parcels compared with valuation of larger parcel - Direct comparison with sales - Valuation of Land Act 1944
APPEARANCES: Mrs SM Symes (one of the appellants) for the appellants
Mr P Rabaa (Crown Law) for the respondent
These are two appeals by landowners in the City of Charters Towers against the unimproved values applied to their lands by the Chief Executive, Department of Natural Resources and Mines (the respondent) as at 1 October 2001, under the provisions of the Valuation of Land Act 1944 (the Act). By consent the two appeals were heard together.
Background
The Symes' family are the owners of a cattle grazing property in the Charters Towers district. As part of a diversification plan, in March 1998 they purchased an allotment of 1,598 m² in Charters Towers, upon which was situated a dilapidated weatherboard house. They renovated the house and planned to develop the balance area, which was described by Mrs Symes as "this untidy stretch of land". A plan for a duplex building consisting of two units each with two bedrooms was prepared, various Council approvals obtained and a concrete masonry block duplex, with Colorbond roofing, was constructed in September 1998.
However, according to Mrs Symes, during the approval process officials of the City Council informed them they would not be able to sell the house and duplex as separate entities. They were aware that the minimum size of an allotment was 700 m² and because of the position of the two buildings it would not be possible to subdivide it to comply with this requirement.
The resulting development has the appearance of two allotments, as a fence has been constructed between the house and the duplex. The respective areas have been measured by Mr G Moroney, the valuer for the respondent, at 927 m² for the area on which the house is situated (the house site) and 671 m² for the area on which the duplex is situated (the duplex site). The appellants' property, with the two apparently separate allotments, is neat and attractive. According to Mrs Symes, as a rental investment it has been a successful venture, as the house and the duplex are let fully self-contained and have proved to be very popular with mining companies.
In an area valuation as at 1 October 1998, the respondent's unimproved value of the 1,598 m² allotment was $22,000. The respondent undertook a further area valuation as at 1 October 2001, when an unimproved value of $19,800 was applied to the allotment as a single parcel of land, notwithstanding that there were then two buildings on the site.
According to Mr Moroney, in May 2003 the Charters Towers City Council requested that the respondent re-examine the valuation of the allotment (together with a number of other allotments) as the use of the property had changed. Mr Moroney was instructed to inspect the property and report on the change of use. As a result of that inspection, the respondent issued two interim valuations for the property, one for $15,800 for the house site and the other for $13,600 for the duplex site.
Mrs Symes gave evidence that the appellants first became aware that there was a change to the valuation of the allotment when they received a letter from the Charters Towers City Council in September 2003, advising that the respondent had undertaken split valuations, resulting in two rate assessments where there had previously been one, for a combined amount almost $10,000 higher than the previous valuation.
The appellants objected against the interim valuations which were disallowed by the respondent. They then appealed to the Land Court.
The Subject Lands
The land comprising these two valuations is described as Lot 2 on Plan MPH 21814, Parish Charters Towers. As explained above, the duplex site is described as having an area of 671 m², while the house site is described as having an area of 927 m². The duplex site is on the corner of Harte Street and Hackett Terrace (Racecourse Road, part of the Townsville/Charters Towers Road). While the house site fronts Racecourse Road, about 2.8 km north-west of the Charters Towers Business District. Both Harte Street and Racecourse Road are full width bitumen sealed and have concrete kerbing and channelling, providing good access. The usual services of electricity, telephone, reticulated water, sewerage, refuse disposal and postal delivery, are available. Each of the sites comprises a rectangular parcel of land with a slight steady fall from the north-west to the east and south-east. Part of the duplex site has been cut and benched to create a level building platform for a concrete slab for the duplex building. The deepest benching of approximately 1 metre in height is in the north-west corner.
The Relevant Legislation
In accordance with the Act, the respondent is required to make annually, or periodically, a valuation of all land in a local government area: s.37. The Act provides that no alteration shall be made in the valuation of any parcel of land during the period between area valuations, except in certain specific circumstances which are prescribed in s.28(1)(a) to (l). The relevant provision in these appeals is paragraph (i), which provides that no alteration shall be made in the valuation during the interim period unless by reason of:
"(iii) any other action or decision of the local government of the area in question affecting the use or development of land, the chief executive is of the opinion that the valuation of such land has altered …"
In these cases the action or decision of the local government which the respondent contends triggered the split valuation, was the approval of the duplex development on the appellants' land. The respondent has valued two parcels of land in an allotment described as Lot 2 on MPH 21814, which has not been subdivided by survey. In doing so, the respondent relies upon the definition in s.2 of the Act:
"'parcel of land' means every part of an area of land which is separately held by any owner, or any part of an area of land which the chief executive directs should be valued as a separate parcel."
Section 34 authorises the respondent to value parcels of land in one valuation or separately:
"(1) Unless the chief executive otherwise directs, there shall be included in 1 valuation -
(a)several parcels of land which adjoin, and are owned by the same person, and where either no part is leased or all the parcels are let to 1 person; or
(b)several parcels of land in the same area which do not adjoin but are worked as 1 holding and used exclusively for the purposes of farming, and are owned by the same person and which, if let, are all let to 1 person.
(2) However, any such parcels of land shall be valued separately if buildings are erected thereon which are obviously adapted to separate occupation and which may respectively be lawfully held under separate ownerships."
Section 35 may also be relevant and provides:
"(1) Unless the chief executive otherwise directs -
(a)several parcels of land which are owned by the same person, but which are separately let to different persons, shall be separately valued; …"
Section 12 allows the respondent to delegate his powers under the Act:
"(1) The chief executive may delegate to an appropriately qualified person the following powers -
(a)the chief executive's powers under this Act;
(b)the chief executive's powers under another Act for the valuation or categorisation of land."
The Appeals
The appellants appealed against both valuations, on the grounds that the parcel of land known as Lot 2 on MPH 21814 had never been surveyed and remained as one parcel, the fence between the buildings having been erected purely for privacy reasons. They went on to point out that permission was obtained from the Council for the development on the understanding that it would remain as one allotment and the house and the duplex could not be sold separately. The other ground of appeal related to the quantum of unimproved value, in that expenditure had to be incurred in order to construct the duplex unit, as the land had to be levelled and filled and an Ergon power pole and line had to be relocated.
Although the appellants contended that there should not have been two separate valuations, the Act required them to state their estimate of unimproved value for each valuation appealed against. Accordingly, they estimated the unimproved value of the 671 m² parcel was $8,314 and that the unimproved value of the 927 m² parcel was $11,486. Those two amounts total $19,800, which was the amount of the previous valuation of Lot 2 as a separate parcel.
The Respondent's Valuations
Mr Moroney gave evidence that the respondent had previously valued the City of Charters Towers as at 1 October 1998, the valuations becoming effective on 30 June 1999. At that time Lot 2 on MPH 21814 was valued as a 1,598 m² allotment used for purposes of a single dwelling house at $22,000.
Mr Moroney went on to explain that the 1998 annual valuation had been undertaken during a period of rising property values, when there was generally an optimistic outlook due largely to an increase in mining activities in the Charters Towers and surrounding districts. That real estate market had peaked some six to 12 months after the 1998 valuation.
However, at the time of the next valuation undertaken as at 1 October 2001, there was a general perception that property values had fallen and selling periods had lengthened. Based on that sales evidence, residential property valuations in Charters Towers were reduced by 10%.
In his oral evidence, Mr Moroney explained that following the request from the Charters Towers City Council to investigate the change of use of a number of properties, he had inspected the subject land and ascertained that the development on it now comprised the single dwelling house and the duplex unit building. He measured the areas of each of the allotments using the dividing fence between the two buildings as the boundary and calculated the area of the house site at 927 m² and the area of the duplex site at 671 m².
Although no documentary evidence was produced, Mr Moroney stated that the respondent Chief Executive had delegated to him certain of the Chief Executive's powers under the Act. It was therefore his duty to consider how he should value the subject land in the circumstances of the new development. He came to the conclusion that he should declare separate parcels in accordance with the areas that were fenced and value each parcel separately.
However, as the duplex site was less than 700 m², the minimum area for residential subdivision, he said that he asked the advice of a Mr Mike Power, the Council officer responsible for subdivision applications. He said that he was informed by Mr Power that the normal minimum requirements for residential subdivision were 15 metres of road frontage and 700 m² of area. While the duplex site had greater than 15 metres of road frontage to both Racecourse Road and Harte Street, the area of the site was less than 700 m². He went on to explain that it was not possible to notionally increase the area of the duplex site because of the setback requirements from the buildings.
According to Mr Moroney, Mr Power informed him that provided other requirements were met, the Council would consider each case on its merits, but he could not see any reason why the smaller area duplex site would not be approved for subdivision. Mr Moroney considered that this was sufficient to allow him to "split" the valuation of Lot 2 into the areas designated by the fence.
Having declared two separate parcels, he then had regard to the provisions of s.34(2) and s.35(1) of the Act and concluded that the two parcels should be valued separately. He had no difficulty in determining that the house site should be valued as such, but considered whether the duplex site should be valued as some other entity. However, he had regard to the provisions of s.17(1) of the Act which directs that in making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house, any enhancement in the value because the land had potential use for some other purpose was to be disregarded. The Act went on to define "single dwelling house" to include "a building consisting of 2 self-contained units known as a 'duplex' and used solely for habitation." Mr Moroney therefore concluded that the duplex site should be valued as a single dwelling house site, excluding any enhancement in value because of its use as a unit site.
Mr Moroney then had regard to the sales that had been used for the area valuation, particularly relying upon four sales ranging in area from 702 m² to 1,156 m² which sold between November 1998 and December 2001 for prices which analysed to show unimproved values ranging from $17,000 to $25,000. A fifth sale in May 1999 of two allotments each of 1,499 m², analysed to show unimproved values of $24,700 for each lot.
In directly comparing each of the sales with the two subject lands, Mr Moroney came to the conclusion that the house site should be valued at $15,800 and the duplex site at $13,600.
The Case for the Appellants
Mrs Symes appeared and gave evidence on behalf of the appellants. The appellants' case consisted of two arguments, first challenging the respondent's right to make two valuations (the legal argument), and second challenging the quantum of the valuations (the valuation argument). The factual background is summarised in Mrs Symes' written evidence:
"The land and dwelling, namely Lot 2 MPH 21814 - area 1,598 m² was purchased 18/3/98 after approval was given by the Charters Towers City Council to erect a Duplex on the eastern side of the allotment. Plans had been submitted and approved by the Council on the proviso that the dwellings could not be sold separately at any later date. Although not surveyed, a fence was erected to give privacy and definition to the Duplex. However, the Ergon power supply pole had to be relocated and power supply to both the original house and the two units is located at the one control box at the units which is another reason for the two dwellings to be considered as a composite package. To our knowledge and certainly without our permission, no survey has been carried out to change the complex to two separate allotments."
In her oral evidence, Mrs Symes explained that the approval for the development was given by the City Council on the clear understanding that because of the size of the allotment and the area that the units occupied, the appellants would not be able to sell them as separate entities. She understood it to be a hard and fast policy of the City Council that residential allotments could not be less than 700 m², yet the duplex site valued by the respondent was stated to be 671 m².
Mrs Symes was at a loss to understand how the City Council could have requested the respondent to make separate valuations, which seemed to be contrary to the condition of the approval of the duplex. She expressed her concern that this was done without consultation, as the first indication that the appellants received was the revised rate notice in September 2003.
Mrs Symes had little evidence in relation to the amount of the valuations. She thought it was unfair that as a result of the Council's action requesting split valuations the appellants now had to pay rates on two properties with a combined valuation almost $10,000 higher than the previous valuation of Lot 2. Her reasoning seemed to be that if there must be two valuations, their combined amount should not be more than the $19,800 which had been applied to Lot 2 as a separate entity.
Of the five sales relied upon by Mr Moroney, Mrs Symes was familiar with only one of them, his Sale 4 situated in Hilton Court, which sold in October 2001 for $25,000. She agreed with Mr Moroney that the property was superior to either of the subject lands, but she made the point that Sale 4 had underground power, with no unsightly powerline. Furthermore, it was a level block which did not need levelling to build a house. In addition, the subject lands were situated on a busy road and suffered from traffic noise, while the property in Hilton Court did not suffer from that disability and was in more of a residential area.
The Issues
There are only two issues in these cases. The first is whether the Chief Executive had the power to declare separate parcels and value the house site and the duplex site separately. The second issue, which was not hotly contested, was with regard to the amount of each of the valuations.
With respect to the legal issue, there is no doubt that the respondent has the power in appropriate circumstances to declare separate parcels, notwithstanding that there has been no survey or reconfiguration of an allotment: see for example Raynbird v Valuer-General (1980) 7 QLCR 99. Neither is there any doubt about the respondent's power, in appropriate circumstances, to value adjoining lands which are held in the same ownership, separately: s.34(2) and s.35(1)(a): Australian Estates Co Ltd v Valuer-General (1981) 7 QLCR 199.
The real question is whether or not the circumstances warranted the respondent taking such action. This turns on whether the duplex site could be subdivided from Lot 2 so that it may be lawfully held under separate ownership. The other legal aspects are certainly complied with as there is no doubt that the buildings erected on both notionally declared parcels are obviously adapted for separate occupation.
Unfortunately, there is a lack of cogent evidence in this regard. I was given no details of the town planning scheme for the City of Charters Towers, or any documentary evidence concerning the conditions of development required by the Council for construction of the duplex, or any other evidence concerning Mr Moroney's conversation with Mr Power of the Council. All I have is Mrs Symes' statement in relation to the first matter and Mr Moroney's statement in relation to the second.
Without further evidence, I can place little weight upon their statements. It may well be that what was said to the appellants was merely pointing out the obvious, that without subdivision the house and the duplex could not be disposed of separately. Mrs Symes has interpreted this as meaning that the allotment could not be subdivided, but no firm conclusion can be drawn as to exactly what was conveyed by the Council.
On the other hand, Mr Moroney relied upon what he was told by Mr Power, the Council officer responsible for subdivision approvals. Mr Moroney interpreted that conversation as indicating that the Council had a discretion to depart from its policy, or perhaps it is a town planning requirement, that minimum area for residential allotments is 700 m². Mrs Symes challenged whether that was so. In the absence of any further evidence, I can place little weight on what Mr Moroney said he was told by Mr Power.
However, that is not the end of the matter. In the two statements tendered by Mr Moroney, are copies of a map showing his Sale 4 in Hilton Court. That map indicates that the two allotments immediately to the west of Sale 4, Lot 12 and Lot 13, have areas of 699 m² and 683 m² respectively. Furthermore, the map showing Sale 5, indicates that the allotment on the opposite side of Morel Court, Lot 1 on SP171608, has an area of 599 m². This evidence indicates that there are residential allotments in the City of Charters Towers which are less than 700 m².
In the circumstances, on the limited evidence that is available to me, I accept that the Council could have approved an allotment of less than 700 m². Therefore, I accept the reasoning of Mr Moroney, acting on the delegated authority of the Chief Executive, in declaring separate parcels and valuing each of them separately, as there are buildings on each of them obviously adapted to separate occupation.
In relation to the amount of the valuation of each of the properties, the only real challenge was summarised in Mrs Symes' written statement, as follows:
"We consider that the unimproved value of MHP21814 (which was the entire block) formerly dated 1/10/01 was realistic and that we should not be penalised for turning, at great expense, what was a scruffy and untidy corner into an aspect that has considerably enhanced the approaches to Charters Towers."
The "great expense" included cutting and filling of the land to create a pad for the construction of the duplex building. However, Mr Moroney did not consider that this was out of the ordinary. He was well aware of the slope of the land and work that was involved in creating a level pad for the building. In other words, it was not something that he ignored in arriving at his assessment of the unimproved value of the duplex site.
In my view, the appellants have not discharged the onus of proof which they carry under the provisions of the Act. Therefore, the appeals must be dismissed.
Orders
1.In the case of AV2003/0823, the appeal is dismissed and the interim valuation of the respondent as at 1 October 2001 of Thirteen Thousand Six Hundred Dollars ($13,600) is affirmed.
2.In the case of AV2003/0824, the appeal is dismissed and the interim valuation of the respondent as at 1 October 2001 of Fifteen Thousand Eight Hundred Dollars ($15,800) is affirmed.
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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