Tantis Pty Ltd v Department of Natural Resources, Mines and Energy
[2004] QLC 54
•16 July 2004
LAND COURT OF QUEENSLAND
CITATION: Tantis Pty Ltd v Department of Natural Resources, Mines and Energy [2004] QLC 0054 PARTIES: Tantis Pty Ltd As Trustee for the Pye Family Trust
(applicant)v. Chief Executive, Department of Natural Resources, Mines and Energy
(respondent)FILE NO:
AV2003/0377
DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under Valuation of Land Act 1944 DELIVERED ON: 16 July 2004 DELIVERED AT: Brisbane HEARD AT: Rockhampton MEMBER Dr NG Divett ORDER: The appeal is upheld, the valuation of the Chief Executive is set aside, and the unimproved value of Lots 1 and 2 on RP 606736 is determined in the sum of Two Hundred and Twenty-Two Thousand, Five Hundred Dollars ($222,500). CATCHWORDS: Statutory valuation – Valuation of Land Act 1944 – Land included in one valuation – Chief Executive’s discretion exercised correctly.
Statutory valuation – Valuation of Land Act 1944 – Relativity – Consistency with sales evidence – Consistency with adjoining properties.APPEARANCES: Mr Pye for the appellant
Mr K Fisher of Crown Law for the respondent
Background:
This matter relates to land at 229 Musgrave Street, Rockhampton, and described as Lots 1 and 2 on RP 606736, Parish of Archer. The subject land has an area of 1,803 m², and is located on one of the two major traffic routes through North Rockhampton. The subject land is accessed to Musgrave Street at its eastern frontage, and also to Victoria Place on its western frontage. Musgrave Street is a bitumen sealed six lane carriageway with concrete kerbing and channelling. Victoria Place to the rear is also bitumen sealed with concrete kerbing and channelling. All normal urban utility services are available. The subject land is zoned Local Business under the Town Planning Scheme of the City of Rockhampton of 8 March 1986, and effective at the date of valuation of 1 October 2002. Controls are further exercised by the Rockhampton City Council (the Council) under its Strategic Plan of 21 March 1997. The key issues are the nature of the land, the use of the land, relativity and comparison of sales.
On 24 February 2003 the Chief Executive issued a valuation of the subject land at $245,000. Following an objection the Chief Executive revised that unimproved value to $225,000 on 17 June 2003. The appellant has now appealed claiming the unimproved value should more properly be $153,500.
Mr Ian Pye, a director of the subject land Trust appeared and gave evidence for the appellant. Mr K Fisher, Counsel of Crown Law appeared for the respondent, calling evidence from Anthony Walter White, the departmental registered valuer responsible for determining the valuation.
In explaining the background to the valuation process, and the reason for the reduction on objection to $225,000, Mr White explains that had occurred following advice from Mr Pye that a registered easement existed over part of the subject land, as well as recognition of previous filling to the rear parcel (Lot 1), which had been unknown to Mr White. Mr White had assessed those disabilities as representing about 475 cubic metres of imported fill, and an allowance of 50% of the land value for the presence of the easements. Those matters are discussed later. (See Exhibit 2 – Action to Objection sheet).
Location of the Land –
It is agreed that the subject land is located in a commercial ribbon strip development area along Musgrave Street, which continues to be one of two major traffic routes across North Rockhampton. The other City bypass (Moores Creek Road) lies to the west of Musgrave Street, connecting with Musgrave Street, and then continuing to the north as Yaamba Road, about 0.9 km north of the subject land. The subject land is about 102 metres south of the major intersection of High Street and Musgrave Street, and opposite the Northside Plaza Shopping Centre, which contains a major retail distributor plus 20 specialty shops. To the north of High Street is the KMART Plaza and the Rockhampton Shopping Fair. Those three shopping complexes are three of the four major shopping centres in Rockhampton.
Because of its location near those major shopping centres, the subject land is seen in a good commercial area. However Mr White explains that the premium commercial location is more to the north of High Street, where the larger commercial redevelopments are occurring. Mr White explains that as you move to the south along Musgrave Street, to about Charles and Elizabeth Streets, then the quality of the commercial activities declines to secondary retail and service industry uses. Mr White advises that those more southern lands south of Charles Street were inundated by the Q100 flood levels. Mr White summarises commercial activity along Musgrave Street as the premium lots north of High Street, good quality from High Street to Charles Street, and lesser quality south of Charles Street. In that total commercial area he advises that there is a total of 204 individual commercial property sites. Mr Pye does not disagree with that understanding.
Access to the Land –
Musgrave Street is a divided carriageway, which has adequate width to allow three traffic lanes to the north and to the south, as well as street kerbside parking adjacent to the subject land. Access to the site is seen as easy. The second rear street frontage of the subject land to Victoria Place is seen as an attractive feature of the subject land.
The Use of the Land –
The eastern Lot 2 fronting Musgrave Street has been developed originally as retail premises, but has more recently been refurbished as office accommodation. The western Lot 1 fronting Victoria Place is developed as parking places. Mr Pye argues that Lots 1 and 2 were separately developed and are capable of separate ownership and use. Mr White rejects that opinion, noting that to his understanding the original retail development of the subject land required the use of the extra parking on Lot 1 as part of that Council approval. On that basis Mr White argues that the current valuation of Lots 1 and 2 as a single development site is appropriate. However he concedes that if the two Lots were to be sold separately, and then not used in conjunction, then valuations into two separate parcels could be undertaken.
Mr Pye argues that the use of the subject land as office accommodation would now require a less number of car parking spaces than was required for its previous use for retail purposes. Mr Pye advises that the eastern Lot 2 currently has about eight car parking spaces available, although the Court is not advised of the actual parking spaces required under the Council’s current development control standards. On the evidence supplied the subject land would appear to be used as a single development, and has a long term lease for that purpose, which expires in 2013.
Mr White advises that the current use of the subject land for professional office accommodation is an as-of-right use under the Local Business Zone (Exhibit 2 - page 16). The Strategic Plan identifies the preferred dominant land use for local business, as for commercial purposes. On that basis Mr White sees the highest and best use of the subject land as for its existing use. The subject buildings are currently under long term lease until 2013 by the State Government.
Mr White agrees that should offsite car parking spaces be required for any future redevelopment on Lot 2 of the subject land, then development contributions for that purpose would reflect about $4,000 per car space. However Mr White notes that with the rear Lot 1 of that total site, such car space contributions were unlikely to be required. Mr White also argues that the highest and best use of the rear Lot 1 if not used in conjunction with Lot 2, would be for service industry or residential use as typified by existing uses in Victoria Place.
The subject land comprises two separate parcels, with frontages to Musgrave Street and Victoria Place each of 20.1 metres, and a total depth of 89.7 metres. The eastern Lot 2 has an area of 895 m², and the western Lot 1 has an area of 908 m². Lot 2 is about 0.2 metres above Musgrave Street, while Lot 1 falls towards the west at Victoria Place. The natural gully along the middle of Lot 2 has been filled at an estimated compacted volume of 473 cubic metres, at a cost of $11,870. Mr Pye does not challenge those figures.
The property is also burdened by a right of way easement along the southern boundary of Lot 1, and also an easement along part of the southern boundary of Lot 2. Easement A on RP 614762 on Lot 1 has a width of about three metres and area of 137 m²; while Easement B on RP 614762 has an area of 18 m². Those two easements provide right of way access to Victoria Place for the adjoining lot to the south of Lot 2 fronting Musgrave Street. The alignment of those easements also contains an existing sewer main, which must be protected during any future developments.
Mr White argues that because the sewer line and the access easement are coincidental, then the disabilities of the access easement are partly dissipated by the need to protect the sewer line. On that basis he has applied a disability for the presence of the access easement reflecting 50% of the actual site rate per square metre, which is his opinion of the development design constraints inherent in the presence of the easement. Mr Pye does not challenge that professional opinion. The subject land is adequately drained, and above the Q100 flood level. Mr White estimates the impact of the easement at 50% of the site rate for 133 m² plus 18 m²; or 151 m² at 0.5 x $130 per square metre or $10,075.
Changes in the Market
Mr White advises that there is a distinct pattern of differentiation in the trend for sales of commercial lands in the Rockhampton area. He argues that small commercial sites less than 1,000 m² have experienced a much slower rate of increase than larger sites of area of 1,000 m² to 4,000 m². He advises further that larger sites greater than 4,000 m² are a different market sector, generally reflecting lower rates per square metre due to their much greater size for development purposes. Mr Pye has no evidence to disagree with that advice, and agrees that small sized commercial sites in Rockhampton have been very slow in the marketplace. Because of this shift more towards sales for bulky goods, such as purchased in the prestige lands north of High Street, the old relativities are now changing.
Method of Valuation –
Mr Pye notes inconsistency in the method of valuation adopted by the respondent. To demonstrate that assumption he notes that in seeking relativity with a series of 50 comparable commercial parcels along Musgrave Street from High Street to the south, there are major variations in applied rates per square metre. (Exhibit 3). Mr Pye notes that the rates per square metre vary from $65.60 to $241.30; while the percentage increases applied to those fifty properties varied from -2.56% to 115.6% over the last valuation period. Mr Pye obtained those figures by analysis of the public valuation roll made available for public display.
In particular Mr Pye notes that a recent sale of a parcel at 237 to 239 Musgrave Street, was seen to be a high sale, yet its unimproved value only reflected a rate of $88.52 per square metre. Mr White advises that application of that property had been inadvertently incorrectly applied. Following an objection process Mr White notes that 237 to 239 Musgrave Street was now valued at the relevant date at $600,000 or $127 per square metre. He advises further that while there had been a further addition of extra land to that parcel, its revised valuation of $620,000 still reflects a rate of $127 per square metre.
Mr Pye argues that such inconsistencies, plus the agreed failure by the respondent to allow for the existing easements or the old filling upon the subject land, provides little assurance about the reliability of the current valuation process. Mr Pye argues that such inconsistencies are demonstrated by direct comparisons between Lot 1 of the subject land and the adjoining parcel to the south of Lot 1 (Lot 3 on RP 606736) fronting Victoria Place. Mr Pye notes that the unimproved value of Lot 3 had remained unchanged at $46,000 ($50.22 per square metre) for an area of 916 m². By comparison he notes that Lot 1 of the subject land of area 908 m² is currently valued as part of the total subject land at an apportioned value of $118,040 ($130 per square metre).
In his assessment of the unimproved value of the two parcels of the subject land, Mr Pye bases his rate per square metre upon the reduction in the valuation from $245,000 to $225,000 in respect of the impact of the easement and the filling upon Lot 1. Applying that rate of $20,000 for 151 m² of the easements, and the filling, he concludes a rate of $3.32 per square metre for the easements. He then estimates the real Lot at 775 m² x $50.22, plus 133 m² at $3.32, concluding a value of $39,362.06 for Lot 1. A similar assumption for the front Lot 2 adopting $130 per square metre concludes a value for that parcel of $114,069.70. By addition he estimates the unimproved value of the whole parcel at $153,431.82 (say $153,600).
Mr Pye also challenges the logic of Mr White’s applying a premium of 5% for the advantage of having rear access to the subject land, as he sees that as double dipping on the road frontages of Lot 1 to Victoria Place.
Mr White does not explain why the two adjoining parcels to the north of the subject land (Lots 1 and 2 on RP 60719) are each approximately the same size and dimension as the subject land, yet are currently valued at $242,500. (Exhibit 2 - SmartMap). That can be compared to the original value of the subject land at $245,000, prior to amendment for the allowance for the filling and the easements. Adopting the applied rate of $130 per square metre, there would appear to be some inconsistency in the applications. The subject land would appear to be slightly lower in elevation than the two adjoining Lots, due to the filling of the gully on the rear of Lot 1 of the subject land.
Comparison of Sales -
Mr Pye argues that to use the inflated sales information reflected in the property at 237 to 239 Musgrave Street, provides an unrealistic opinion of general land values in that location. He draws that conclusion from a comparison with a nearby sale of the National Bank building located at 184 Musgrave Street, only 400 metres south of the subject land. He notes that Mr White has not used that 1,614 m² sale, which he argues would provide a more realistic comparison with the subject land. Mr Pye notes that property sold as an improved two-storey ex-bank building to local accountants on 28 September 2001, for $440,000. Mr Pye advises that he purchased the subject land in May 1995 for $446,000, and his valuation advice in respect of several reviews for purposes of rent assessment is that the market movement over the last five years did not support any increases. (Exhibit 3). Mr White agrees with that conclusion. Mr Pye notes that Mr White has not analysed the National Bank sale for whatever reason, but he argues that sales evidence is the best guide to market values.
To support his valuation Mr White provides the following sales of vacant or lightly improved lands all of which are flood-free:
· Sale 1 – (141 Musgrave Street – Lots 7 and 8 on RP 603436). This is a 736 m² parcel of 20 metre frontage located about 700 metres south of the subject land. The sale has similar location, topography, frontage, access and services, but is smaller. Overall the sale is seen as inferior due to its smaller size. The sale is used as a car sales yard, and sold in May 2001 for $160,000, was analysed at $150,000 ($204 per square metre) and applied at $128,000 ($174 per square metre). The sale was valued at $150 per square metre, plus a 10% corner and 5% rear access allowance.
· Sale 2 – (387 Yaamba Road – Lot 3 on SP 158478). This is a 1,562 m² parcel with frontage of 38 metre, and located about 1.6 kms north of the subject land. The sale has superior location, exposure and frontage, and similar size, topography and infrastructure. Overall the sale is seen as superior due to its better location. The sale sold in February 2002 for $350,000, and was analysed at $317,182 ($203 per square metre) and applied at $285,000 ($182 per square metre). The sale was valued at $160 per square metre, plus 15% for its corner influence.
· Sale 3 – (237 to 239 Musgrave Street – Lots 1 and 2 on RP 607156, Lots 1 and 2 on RP 607149, Lot 1 on RP 607455, and Lot 3 on SP 110012). This is a 4,697 m² parcel of 60.5 metres frontage located about 80 metres north of the subject land at the High Street intersection. The sale is superior in size, frontage, exposure and location, has similar topography and infrastructure and is overall superior due to its size and location. The sale sold in July 2002 for $800,000, was analysed at $777,273 ($165 per square metre), and applied at $600,000 ($127 per square metre). The sale was valued at $120 per square metre, plus a 10% corner allowance, and a 5% rear access allowance, and less an allowance of $47,500 for imported fill and $1,230 for a pipeline. The sale is seen as a high sale, and is not a basic sale comparison. The sale property has subsequently resold for $1,100,000. The sale was the former Premier Sound and Skating Rink, which has been demolished for high rise office and retail accommodation development purposes.
[26]
· Sale 4 – (120 to 126 Musgrave Street – Lots 4 and 5 on RP 606406 and Lot 2 on RP 609521). This is a 2,140 m² parcel of 75 metre frontage located about 800 metres south of the subject land. The sale is similar in topography, infrastructure and access, and superior in size, exposure and frontage, but inferior in location. Overall the sale is seen as superior due to its size. The sale sold in November 2002 for $310,000, and was analysed at $276,818 ($129 per square metre) and applied at $285,000 ($133 per square metre) or 101% application. The sale was valued $115 per square metre, plus 10% corner and 5% rear access allowances.
The sale of the larger parcels demonstrates the sales approach adopted where developers prefer sites with the aggregation of several sites for a site large enough for development. The larger more ambitious approach to development to five storeys on Sale 3 (237 to 239 Musgrave Street), has still to proceed, due to lack of demand for above ground level office accommodation. For that reason Mr White has not adopted his Sale 3 as a basic sale, and sees Sale 3 only as a high sale, and hence only applied at 77%.
In respect of Mr Pye’s concern that the chosen four sales comparisons represent a selected view of scarce comparable properties, Mr White rejects that opinion. Mr White advises that he analysed further sales of vacant lands in this area, and chose the four selected sales as the most comparable. Mr White rejects that there is any influence of scarcity in that array of sales, which he notes reflects a fair representation of the 204 commercial properties in that locality.
Mr White rejects the use of the highly improved National Bank building sale in view of the availability of adequate sales of vacant lands, and also the recognised uncertainties associated with arriving at the added value of any improvements. Mr White also rejects that the National Bank building provides a similar added value as exists on the subject land.
In any case Mr White notes that due to the similarities of the parcel, and the subject land, the current unimproved value of the National Bank site at $225,000 supports the current unimproved value of the subject land. Its previous unimproved value was $150,000 showing a 50% increase compared to the subject land (58%). The subject land had increased from $142,000 to $225,000 (58%) (Exhibit 3). Mr White advises further that the upstairs mezzanine floor of the subject land represents only about 20% of the site cover, compared to the 100% site cover for the upper floor on the National Bank building.
In respect of the current Easement A for access over Lot 1, Mr Pye notes that it currently restricts the existing double bay car parking spaces on that parcel. However he concedes that the current parking could be rearranged to allow parking which also uses that right-of-way, as long as they do not restrict access to the adjoining parcel to the south of the subject land fronting Musgrave Street. While that easement encumbers the subject land, it does not prevent some use of the land under the conditions of the easements. Mr White has estimated that use of the easement at 50% of the total site value.
In respect of the change of traffic flows along Musgrave Street, Mr White confirms that all of his sales evidence had occurred subsequent to those traffic changes being implemented. Mr White also confirms that the subject land had been valued as a single parcel under s.34(2) of the Act, since the original development of the property for retail purposes. He understands that those Council conditions still apply to the subject development.
Decision:
Before examining the evidence, I turn to the legislation and note that the unimproved value of the subject land is defined by s.3(1)(b) which states:
“3.(1) For the purposes of this Act –
‘unimproved value’ of land means –
(b)in relation to improved land – 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.”
The question then to be addressed is whether the subject land is to be assessed either as a single parcel, or as two separate parcels. In that regard s.34 of the Act relevantly directs:
“34.(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 …
(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.”
The Concise Oxford Dictionary defines a “building” as a permanent fixed thing built for occupation.
Clearly, as there is no “building” erected upon Lot 1, that could be occupied separately to Lot 2, then both Lots 1 and 2 could be valued in a single valuation. It is noted that discretion to direct whether two valuations could be undertaken lies entirely with the Chief Executive. It is not for this Court to direct the Chief Executive in a matter which lies entirely within his discretion. That was clarified in Reinke & Ors v Valuer-General (1969) 36 CLLR 178, where the Land Appeal Court considered whether it was legal for the Valuer-General to value a group of properties as a single valuation under the Act. The land in question included four parcels which were occupied by a group of eight buildings, none of which were located wholly upon one of the subdivided parcels. The question in that matter was whether s.5 of the Act as it then was (now s.2) relating to the definition of a “parcel of land” should be taken to refer to that land in the Town of Raglan.
While the provisions of s.14 as it then was (now s.34) were not seen as relevant in that matter, the findings of the Land Appeal Court in respect of the powers of the Chief Executive to exercise discretion were noted as follows at 181:
“In order to enable the Valuer-General to more effectively and appropriately carry out this general charge it seems to us that the Legislature by necessary implication intended the Valuer-General to exercise the direction mentioned in the second part of the definition ‘parcel of land’ contained in section 5, i.e. the power to direct any part of an area of land to be valued as a separate parcel. We are of the opinion that we should reasonably imply that such power exists. For authority for implying this power we refer to Maxwell on ‘Interpretation of Statutes’ (11th edition), p. 350, where the author states – ‘Where an Act confers jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution.’ In Nokes v. Doncaster Amalgamated Collieries Ltd. 3 All E.R. 549 at p. 554, Viscount Simon L.C. says – ‘At the same time, if the choice is between two interpretations the narrower of which would fail to achieve the manifest purpose of legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction, based on the view that Parliament would legislate only for the purpose of bringing about an effective result’.”
That approach was later followed in Gibson Investments Pty Ltd v Valuer-General (1978) 5 QLCR 223 at 227; and also in AH Raynbird v Valuer-General (1980-81) 7 QLCR 99 where the Land Appeal Court said in respect of the Valuer-General’s discretion to provide separate valuations, at 103:
“The principal issue when these parcels were before the Land Court in 1966 was whether the Valuer-General had power to create the respective parcels and value them as separate entities. The Land Court upheld the Valuer-General’s power to create the parcels - vide (1966) 33 C.L.L.R. 76 at pp 78/80. We see no point in reiterating the reasons there given. Since that date there have been cases coming before this Court which have established that the Valuer-General has power to create parcels of land as he deems appropriate for the more effective administration of the Valuation of Land Act – vide Gibson Investments Pty Ltd v. The Valuer-General (1978) 5 Q.L.C.R. 223 and Valuer-General v. Reinke – (1969) 36 C.L.L.R. 178.
If the Valuer-General acted capriciously or unreasonably in creating any parcel we are inclined to the opinion that this Court and the Land Court have jurisdiction to find the resulting valuation ultra vires the Valuation of the Land Act – vide Reinke v. Banana Shire Council (Full Court Queensland) 1968 Qd. R. 453 and Kilcoy Shire Council v. Brisbane City Council (1970-71) 124 C.L.R. 60. There is no suggestion that such considerations arise in the subject cases.”
In the matter of Tobin v Valuer-General (1986-87) 11 QLCR 29 the Land Appeal Court found at 33:
“Counsel for the appellants invited us to express a view that the two appeal parcels should be included in one valuation. We have no power to direct that the Valuer-General, in the exercise of his discretion under Section 14 of the Valuation of Land Act, as to what lands he should include in the one valuation.”
There is no evidence in the current matter to indicate that the Chief Executive has exercised his discretion inappropriately.
Method of Valuation –
In seeking guidance about the most direct method of valuation to determine the unimproved value of the subject land, I note that Courts at all levels have long held that comparisons with comparable sales of vacant or lightly improved lands, if they are available, are the most appropriate approach. That was clearly directed in Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327, at 329; and in R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13, at 17. It was perhaps most clearly explained in PH Clough v Valuer-General (1981-82) 8 QLCR 70, where the Land Appeal Court said at 76:
“It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value. The reason is obvious. In applying such sales there is no room for error in analyzing the value of improvements.”
The use of relativity is also an appropriate method of establishing an unimproved value, but must be consistent with any comparable sales approach. That was emphasised in WM and TJ Fischer v Valuer-General (1983) 9 QLCR 44, where the Land Appeal Court said at 46:
“It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence.”
In the current matter Mr White explains that relativities have been changing between commercial properties in recent times, and he has had to manually adjust the previous relativities. In that respect he indicates that the unimproved value of the National Bank site may have been slightly high, bearing in mind its smaller size. (See paragraph [22]). Allowing for some minor adjustments in the relativities the recent changes in the unimproved values of both the National Bank site and the subject land appear consistent.
In respect of the appellant’s concern about the reliability of the respondent’s use of the mass appraisal system of valuation, and any inconsistencies that may occur as a result of that process, I note that has been raised many times by appellants. I note for instance in the matter of Greenmount Units Pty Ltd v Department of Natural Resources, Mines and Energy (AV2002/0252 & Ors), 2 March 2004, unreported, the Member said at paragraph [46]:
“In the end the effectiveness of the “mass appraisal” system is likely to be seen in the relative public understanding of the process. I believe that Mr Bullock may have a fair argument that the general public does not fully understand the process, or their rights of objection and appeal under the Act. While that may be true, it does not necessarily indicate that the professional valuers such as Mr Crowley are not correctly undertaking their valuations under the Act. The presence of a public “website” on the Internet demonstrates that the Chief Executive’s desire is to make relevant information available to the public. But as with many heads of legislation, the public’s understanding of the relevant law is often found to be less than well informed.”
The process of mass appraisal of valuation using a large computer system has been the subject of considerable concern since it was first introduced in Queensland in 1985. However, while there has been various appeals against the reliability of such a system, perhaps the clearest direction in that matter is to be found in the decision of the Land Appeal Court in BG and AK Wilson v Chief Executive, Department of Lands (1994-95) 15 QLCR 63. In that matter the Land Appeal Court considered similar evidence to that currently provided by Mr White, as to how he goes about his task of an annual valuation.
The Land Appeal Court found at 70:
“The process of annual valuations which was introduced by legislation in 1985 was designed to avoid the penalty of an owner being cemented to a value for rating purposes for up to five years and possibly eight years. The scheme of annual valuation enables values to follow the market on an annual basis. The scheme would not work without the aid of computers. … The process in our opinion does not offend the statute.”
In the matter of Mr White’s application of a 5% increase for the additional rear access of the subject land, I note Mr Pye argues that should not occur. However as noted previously, the comparison of the subject land as a single site does include the advantages of two-street frontages. Any comparison by Mr Pye with the single frontage adjoining parcel 1 in Victoria Place, ignores the benefits of that additional flexibility. I accept Mr White’s consistent application for that purpose, which he has also applied in the analysis of his sales. In respect of Mr White’s application of a 50% discount for the areas of the easement on the subject land, I accept his professional opinion of that disability.
Comparison of Sales –
If I turn then to the basic sales evidence I find the following comparative rates for the similar sales:
SaleArea Basic Rate Comparison
1736 m² $150 per square metre Inferior/smaller
21,562 m² $160 per square metre Superior/better location
42,140 m² $115 per square metre Superior/larger and wider
frontage, but inferior
location
Subject land 1,803 m² $130 per square metre -
On those comparisons, there is nothing to demonstrate that Mr White has made an error of fact, or that he has followed an incorrect principle of valuation.
Relativity –
If I then accept the rate of $130 per square metre for commercial lands in that immediate vicinity of the subject land, I note the apparent inconsistencies with the two adjoining Lots as noted in paragraph [21]. On that basis I believe that a value of $242,500 should also be applied to the subject land, prior to any adjustment of $20,000 for the easement disability and the filling of Lot 1, and I could conclude an unimproved value of $222,500.
Summary:
In summarising this matter I am reminded that s.33 of the Act directs:
“33. Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.”
I am also reminded that the onus to prove his case rests with the appellant in respect of his notice of appeal under s.45(4) which states:
“45.(4) Such notice 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.
On the evidence I believe there is some room for a minor adjustment to the unimproved value of the subject land.
Conclusion:
Having considered the whole of the evidence I am persuaded that the appellant has partly proved his case. The appeal is upheld, the valuation of the Chief Executive is set aside, and the unimproved value of Lots 1 and 2 on RP 606736 is determined in the sum of Two Hundred and Twenty-Two Thousand, Five Hundred Dollars ($222,500).
NG DIVETT
MEMBER OF THE LAND COURT
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