Taylor v Chief Executive, Department of Lands

[1996] QLC 74

[1996] QLC 74

 

  LAND COURT

BRISBANE

31 MAY 1996

In the matter of an appeal against a valuation
  Valuation Roll No.:    16882
  Local Authority:          Gold Coast (V95-655)

William F and Jill Taylor
  v.
  Chief Executive, Department of Lands

(Hearing at Coolangatta)

D E C I S I O N

This matter arises under the provisions of the Valuation of Land Act 1944. Pursuant to the Act the Chief Executive has applied a valuation of $435,000 to the subject land as at a relevant date of 1 January 1995, whereas the appellant seeks a figure of $375,000.
           Mr William Francis Taylor appeared for and gave evidence on behalf of the appellants.  Mr Shaun Michael Farren, a registered valuer employed by the Department of Natural Resources (which includes the previous Department of Lands), gave evidence in support of the Chief Executive's valuation and tendered his written valuation in this regard. 
           The subject parcel is situated in the suburb of Isle of Capri, Gold Coast, being approximately 1 km west of the Surfers Paradise oceanfront.  Mr Farren's written valuation describes the subject land as being a near rectangular shaped waterfront block with a truncated north east corner.  It is a filled, predominantly level lot with a moderate bank to a revetment wall.  The land has no drainage problems.  The western boundary has frontage to Adam's Basin with wide water outlook to the west/south-west.  The frontage of the allotment to the road is longer than its water frontage owing to the bend or truncation along that boundary.  Access to the property is via either Naples Avenue which is a cul-de-sac road or Valencia Avenue, both of which are bitumen sealed roadways having concrete kerbing and channelling. 
           Mr Taylor did not give evidence directly in support of the figure for which he contends, however, did raise a number of concerns which he argued impacted upon the valuation of the Chief Executive.  The first and perhaps the most significant of these, according to his view, was that the Chief Executive was not employing an unimproved capital value method of valuation but was using an improved value method.  This contention arose following Mr Taylor's appreciation of the sales evidence referred to in Mr Farren's valuation.  In that valuation Mr Farren relied on three sales, each of which had been sold with a residential dwelling constructed on it but which had been totally demolished following settlement.  The first of Mr Farren's sales adjoins the subject land and sold on 25 January 1995 for a price of $510,000 to which Mr Farren has added $10,000 to provide for the costs of demolition and removal of the existing structure.  He has then taken into account other figures for fill, canal wall, fencing and clearing to arrive at an analysed unimproved value of $491,500 which he applied to $470,000.  The second sale is located about 130 metres east of the subject land, sold on 7 February 1995 and was analysed in a similar manner to that employed in Sale 1 to an applied value of $430,000.  The third sale took place on 16 December 1994 and is located in the promenade on the other side of Adam's Basin.  The same method of analysis was employed in this case, revealing an applied value of $500,000.
           It is the fact that each of these sales involves the purchase of land with a residence constructed on it which concerns Mr Taylor.  He sees such a method as a change in the system of valuation.  The approach employed by Mr Farren is, however, not a change in the system of valuation but a method of valuation supported by the High Court in Valuer-General v Fenton Nominees Pty Ltd (1982) 150 CLR 160, a case dealing with the Valuation of Land Act 1971 (South Australia) in which a company acquired several parcels of land near the commercial centre of Mt. Gambier, demolished the buildings on them, consolidate the titles and erected a Supermarket on the whole of the land. At page 166 of the Court's decision their Honours wrote:

"The importance of these sales is that they tended to establish the price which a developer would be prepared to pay for vacant land suitable for the appropriate development.  Although the developers acquired parcels of improved land in assembling their sites they were acquiring improved land in order to convert it into unimproved land as part of a consolidated site which they could then develop.  The improvements existing on the land which they acquired had no value to them.  Consequently no part of the purchase price reflected a value placed by them on those improvements.

In these circumstances the price which the respondent paid was one element, indeed the largest element, in the cost of acquiring a site consisting of vacant land suitable for development.  The other elements were the costs of demolition and of earthworks.  It is only by adding these costs that one can establish the price that the developers were prepared to pay for a suitable site with no improvements upon it.  It follows that the approach adopted by Mr. Quintrell was correct and that the primary judge was right in accepting his approach."

Although in the case before me we are concerned not with the assembly of a commercial development site but with sales of residential blocks of lands with houses constructed on them, the principle in so far as the law relating to unimproved value is concerned is the same.  The sales employed by Mr Farren and his analysis of them reveal what purchasers are willing to pay for blocks of land which, for their purposes, are ostensibly vacant.  The analysed and applied values revealed by this process do provide suitable bases for comparison with the subject land to indicate what a hypothetical prudent purchaser might pay for that land devoid of all improvements. 
           It will be noticed that the first two sales referred to by Mr Farren occurred shortly after the relevant date of 1 January 1995.  Mr Taylor raised this as a matter of concern however, I have referred to the cases and find the following quotation from
RF & EA Wiggins v. The Valuer-General (19 November 1992) unreported at pp.3-4 to be relevant in these circumstances:

"The valuation was not to be made `at' (or on) that date but `as at' that date. As Mr Justice Windeyer has pointed out `The value of any land must obviously depend not on the date when the assessment of value is made but on the date as of which it is made.' (Kilcoy Shire council v. Brisbane City Council (197) 124 CLR 60). In other words, the Valuer-General was not obliged to make the valuation on 31st March, 1991, but was obliged to determine what the unimproved value of each block of land was at that date. In making the valuation he could have regard to sales to comparable blocks of land at or about that date (emphasis added).  The Act does not oblige the Valuer-General to consider only sales prior to or on that date and ignore proximate but after date sales which help to provide a basis for assessing the value of a particular block at that date."

Mr Taylor also raised in his appeal the fact that he is a pensioner and holds a pension card and that the prospect of ever-increasing local authority rates may have an impact on the ability of his family to remain in what has been the family home for 15 years.  The reality of the situation is one of which I am well aware, however, I must deal with the matter in accordance with the jurisdiction bestowed upon the Court by the provisions of the Valuation of the Land Act.  That statute does not contain any provision which either directly or indirectly allows me to take into account the matter of whether an appellant is a pensioner, or suffers under some other economic disability.  Whilst I may express some understanding of Mr Taylor's situation, it must be appreciated that the Land Court is not a rate relief tribunal but, in respect of the appeal before me, is simply charged with considering the question of unimproved value by reference to objective market evidence. 
           Mr Taylor mentioned that the value first placed on the subject land by the Chief Executive was $485,000, but this was then reduced to $435,000, a figure maintained following objection by the appellants.  Under cross-examination Mr Farren said that the figure of $485,000 was an "error", by which he meant that in his view this figure was wrong and that the evidence supported a figure of $435,000.  It is apparent that the valuation of $435,000 has been made pursuant to s.28(1)(h) and 29(1) of the Valuation of Land Act. These sections provide for the correction of such errors and it is not a matter for me to enquire into the earlier figure of $485,000.  Mr Taylor also mentioned that the address of the subject property is an important consideration, expressing himself in these words,"..... the UCV of my property should surely be considered on the basis of my address being No. 1 Valencia Avenue and not the more prestigious address of 28 Naples Avenue for valuation purposes."  He said that this matter of address was the basis of a successful objection involving the 1990 valuation however, from the Chief Executive's side there was no evidence available to indicate exactly why there had been a reduction on objection at that time.  This is not a matter however, with which I need to concern myself as in McMurray v The Valuer-General 1983 9 QLCR 35 at 37 the Court said:

"The evidence as to the amount of any reduction allowed on the hearing of a prior appeal is of no assistance in this case.  Every revaluation requires consideration of the evidence as it exists at a particular date..."

Mr Taylor raised in this appeal a suggestion that there was a devaluing effect on properties, including the subject land, caused by business offices and cottage industries in operation in the "Residential A" area of the Isle of Capri, namely 15 Naples Avenue and 47 The Corso, together with the numerous rented premises occupied by what he termed "irresponsible tenants".  This matter and the matter of the impact of the address of the subject of land can best be dealt with by considering the application of the sales evidence relied upon by Mr Farren.  In this regard I note that Sale 1 is an adjoining property considered to be slightly superior to the subject, whilst Sale 2 is substantially smaller than the subject (594 m² as against 954 m²) has a smaller water frontage and is subjected to disturbance from more water-based traffic.  The comparisons proffered by Mr Farren between Sales 1 and 2 and the subject clearly support the value applied by the Chief Executive and, given their nearby location, take into account the various factors raised by Mr Taylor.  The third sale is seen as being superior to the subject by Mr Farren and supports the conclusion arrived at by the application of the other two sales. 
           The result is, having considered the evidence put forward by Mr Taylor and the arguments advanced by him, that I am not convinced that the valuation of the Chief Executive is wrong.  It follows that the appeal is dismissed and the valuation of the Chief Executive is affirmed.

RP SCOTT  
  MEMBER OF THE LAND COURT