The Proprietors "Oak Cliffs" Building Units v Chief Executive, Department of Lands

[1995] QLC 114

[1995] QLC 114

 

  LAND COURT

BRISBANE

29 September 1995

Re:     Appeal against a valuation -
Valuation of Land Act 1944 -
  Redcliffe City Council -
  AV95-168.

The Proprietors "Oak Cliffs" Building Units
  v.
  Chief Executive, Department of Lands

D E C I S I O N

(Hearing at Redcliffe)

This is an appeal by the Proprietors "Oak Cliffs" Building Units against the determination of the Chief Executive, Department of Lands, of the unimproved value of Lots 1 to 5 on Building Units Plan 2641, parish Redcliffe, in the sum of $305,000 for the purposes of the Annual Valuation of the Area as at 1 January 1995.
           The appellant body corporate is contending for a value of $225,000 which was the unimproved value applied to the site for the purposes of the previous Annual Valuation.  The appeal is brought on these grounds -

(a)No truly comparable sales justify an increase.

(b)Lots with identical area received NIL increase.

(c)Position opposite BBQ/picnic area creates disturbance during most weekends, exception of course when weather is bleak and rainy.

The subject lot is almost square in shape with an area of 1068m².  The lot is situated at 129 Flinders Parade, Scarborough, which is a full width bitumen road with concrete kerbing and channelling.  It is agreed that the lot provides good building land; that it is level with the road; is on a high cliff with magnificent easterly views to Moreton Bay and Moreton Island and that it is about 50 metres north-west of Queens Beach.  The lot is zoned "Residential C" under the Town Plan and is improved with five units.

In the hearing of the appeal, the body corporate was represented by Mr JF Barnes, a unit owner and chairperson of the body corporate.  He had been a registered valuer for the period between 1967 and October 1993 when he retired.
           The valuation written on behalf of the Chief Executive was written by Mr TS Alexander, registered valuer in the employ of the Department of Lands. 
           At the outset I may recite the relevant provisions of s.45 of the Act dealing with the onus of proof in these proceedings.  Sub-sections (3) and (4) of the section provide -

"(3)  An appeal shall be instituted by filing a notice of appeal in the Land Court registry.      

(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.  "

Apart from reciting his association with the body corporate and his qualifications, the statement of evidence tendered by Mr Barnes is brief.  I repeat the substantive parts.

"Prior to computerisation, officers from the Valuer-General's Department, each five (5) years would carry out visual inspections and so arrive at an unimproved value.  By their liaising with local valuers and real estate agents, appeals were the exception.

The Lands Department has readily admitted to problems associated with the switch to a computerised system.  (see attached article from "Courier-Mail" of 2 August 1995).

Finally, perusal of the Valuation Register appears to reveal that the only increases seem to apply to land upon which strata title units have been built.

Are we seeking to arrive at the unimproved value of land?  "

The answer to the question posed is found in the general principle applying to the valuation of land under the Act which is that land is valued unimproved for its highest and best use.  There is no dispute that the highest and best use of the subject land is for multi-unit purposes.  The question that follows is what is its unimproved value as at 1 January 1995 for this purpose.  In answering this question, the Land Appeal Court said (which has been said often before) that -

"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.

Because there is less room for difference of opinion as to value of the various items of improvement and comparison is thus simpler, it has been held that highly improved sales should be avoided in preference to sales comprising a lesser degree of improvement.   "

(Clough v. The Valuer-General (1981-82) 8 QLCR 70 at p.76).

I may qualify this statement with another taken from the Land Appeal Court in Grahn v. The Valuer-General (1992-93) 14 QLCR 327 in which at p.328 the Court said:

"(e)Whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence (WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44, at p.46). "

In prosecuting the appeal no sales (whether truly comparable or not) were put before the Court by the appellant.  The estimate of value contended for by the appellant was the previous valuation applied by the Department which Mr Barnes said in the course of his evidence and as stated in the notice of objection, the proprietors were prepared "to wear" but as will be seen, no relevant hard evidence was put before the Court in support of either this contention or in support of the second last paragraph of the statement of evidence of Mr Barnes.  In substantiating the statement, Mr Barnes referred to values applied by the Chief Executive to lots on either side of the subject lot which values for the purposes of this Annual Valuation were the same as those applied in the previous (1993) valuation.  The valuations of these lots, however, fell to be determined as exceptions to the rule of "highest and best use" for reasons that the lots were to be valued as sites exclusively used for purposes of a single dwelling house - one with a single unit residential dwelling thereon and the other two flats, one "of which is occupied by the resident owner" - see s.17 of the Act and the definition of a "single dwelling house".
           Mr Alexander who wrote the report and valuation (Exhibit 4) said that for the purposes of this Annual Valuation, he valued all frontage land on the Redcliffe peninsula and that his investigations revealed that sales of land for single unit residential purposes demonstrated no increase in the period between the respective valuations.  There is no point in pursuing whether that be so in view of the fact that the subject lot and the lots referred to by Mr Barnes for relativity purposes are required by law to be valued for different purposes.
           Mr Alexander put before the Court details of sales of two parcels of land zoned for multi-unit purposes and situated on the frontage.  Sale 1 comprises the sale of a site of 1072m² situated at 38 Gayundah Esplanade, Woody Point.  This lot which is zoned "Residential C" sold in March 1994 for $330,000.  The land contained at sale a house, pool, garage, fencing and clearing.  These improvements were subsequently demolished/removed.  The site remains vacant and units are to be developed.  The analysis of the sale revealed a land value unimproved of $320,000 or $298.50 per m²,  in comparison with the value applied to the subject lot which equals $285.60 per m².  The sale lot and the subject lot are of comparable size, both are on the Esplanade overlooking Moreton Bay and Moreton Island and both are within the same zoning.  Mr Alexander said that the sale, however, was slightly superior in that it was a little closer to Brisbane.  When put to him, Mr Barnes would disregard the sale as being too far away.  However, I prefer the opinion of Mr Alexander which is based on his researches covering all frontage land and whilst it may be argued (not in this case) that certain areas of the frontage may be more attractive to certain purchasers than others, that in itself (were it the case) is no ground for discarding consideration of a sale which is comparable in all other respects.
           Sale 2 is situated at 139 Flinders Parade, Scarborough.  This sale is situated but a short distance to the north of the subject lot.  It is a smaller lot of 673m². It is zoned "Residential C".  The site was purchased by Rosepetal Pty Ltd in August 1994 for $230,000.  At the date of sale, the site contained a home, clearing and fencing.  Mr Alexander allowed an added value of $5,000 for these improvements, leaving an unimproved land value of $225,000 or $334 per m².  He sees the sale site as a superior site for marketing purposes due to its smaller size and consequently (as reflected in the sale) in a more competitive market.  He agreed that the home has not been demolished.  It is, in his opinion, in a run-down condition and he is satisfied that the site was purchased for redevelopment under the zoning. 
           The ambiguity in relativity between the subject site and these sales sites, were the subject land to be valued at $225,000 or $210m², is evident when this figure is put beside Sale 1 at $298 per m² and Sale 2 at $334 per m².  That ambiguity is removed with the value applied by Mr Alexander.
           Returning then to the third ground of the appeal, Mr Alexander said that he was aware of the BBQ area and the use made of it and he spoke about the location of the subject site and Sale 2 to this area and also of their location to the beach.  In reflecting upon the provisions of the Act dealing with the onus of proof, I find that I am not persuaded to alter the result of Mr Alexander's reasonings in this respect nor in his application of the sale market to the subject lot.
           Accordingly, the appeal is dismissed and the determination of the Chief Executive is affirmed.

(DM White)              
  President of the Land Court