Theuerkauf v Valuer-General
[2011] QLC 28
•19 April 2011
LAND COURT OF QUEENSLAND
CITATION: Theuerkauf v Valuer-General [2011] QLC 0028
PARTIES:Earl Melville Theuerkauf
(Appellant)
v.
Valuer-General
(Respondent)
FILE NO:VLA262-10
DIVISION:General Division
PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 which applies due to s.269 of the Land Valuation Act 2010
DELIVERED ON: 19 April 2011
DELIVERED AT: Brisbane
HEARD ON: 25 March 2011
HEARD AT:Toowoomba
MEMBER:His Honour Mr WA Isdale
ORDER/S:1. The appeal is allowed.
2.The amount of the valuation is reduced to $120,000 in order to determine the same correctly.
CATCHWORDS: Valuation of Land Act 1944, ss 33, 45, 66
Land Valuation Act 2010, s.269
J.L. and I. Qualischefski & Ors v Valuer-General (1979) 6 QLCR 167
N.R. and P.G. Tow v Valuer-General (1978) 5 QLCR 378
W.M. and T.J. Fischer v The Valuer-General (1983) 9 QLCR 44
Brisbane City Council v The Valuer-General (1978) 140 CLR 41
R. and M.M. Barnwell v The Valuer-General (1990-91) 13 QLCR 13
Thomson v Department of Natural Resources and Mines [2007] QLC 92
Chief Executive, Department of Natural Resources and Mines v Kent Street Pty Ltd [2009] QCA 399
Kevin J and Rosemary A Copeland v Chief Executive, Department of Natural Resources AV98-907, 908 and 909 Brisbane 15 December 2000
Trevor R. Armstrong v Chief Executive, Department of Natural Resources AV97-438 Brisbane 4 December 1998
APPEARANCES: Mr EM Theuerkauf represented himself
Mr J O’Rourke, solicitor and principal legal officer, Department of Environment and Resource Management, for the Respondent
The appeal
The appellant is the owner of Lot 1 on Registered Plan 155845, Parish of Campbell. It is held in freehold and has an area of 8.107 ha. There is an easement in favour of the Queensland Electricity Commission which burdens the land. It is situated about 11 radial kilometres south east of the City of Toowoomba.
The Valuer-General, pursuant to the duty imposed by the Valuation of Land Act 1944, values the land at $135,000 on the date of valuation, 1 October 2009.
The property is zoned Rural Agriculture/Rural General under the planning scheme of the Lockyer Valley Regional Council and is used for rural residential purposes, which conforms with the zoning.
Dissatisfied with the valuation, the appellant has appealed to this Court. His notice of appeal, which became exhibit 1, gives his estimate of the land’s value as $85,000. His grounds of appeal referred to the presence of massive towers carrying high tension powerlines on the easement, electro-magnetic radiation from the lines and loss of privacy due to a development. He pointed out that the road is gravel, there is no garbage collection and that clearing lantana and other regrowth is a constant expense. The notice of appeal also states that properties in the area have sold below the valuations on them.
The appellant’s evidence
The appellant sought to tender written material provided to the Court and to the respondent in support of his case. This was objected to by the legal representative for the respondent on the basis that it was due to be provided by 11 March 2011 and was not received by them until 16 March 2011 and by the Court on 17 March 2011. The Court did not allow the objection as its duty is to apply rules and procedures so as to resolve the real matters in dispute between the parties. In view of that, it was preferable to have the material in evidence rather than to exclude it. It became exhibit 2.
The appellant gave evidence and acted as advocate, a duality of roles. He described the photographs in exhibit 2 and introduced two photos, taken on 19 March 2011 which showed the effects of flooding on access roadways. They became exhibits 3 and 4.
The photos in exhibit 2 show clearly the erosion in gullies on the subject land, access aspects and the very large power line supporting towers.
The appellant referred to a sale, documented in exhibit 2, of Pamela Joy Dunbar to Benecke Pty Ltd on 3 July 2010. It was for 101.8 ha with a dwelling and, according to the Queensland “QVAS” Sales Data Listing, sold for $195,000 when valued, at 1 October 2009, at $230,000. The appellant gave evidence that powerlines do not cross this land, it is not cleared and there are two blocks of land between the subject and this sale.
The appellant also drew particular attention to the sale of 80.434 ha on 13 February 2001 from Jiona Investment Pty Ltd to Therese Mary-Majella Landers. It was valued at $57,000 with a valuation date of 1 October 1998 and sold for $35,000. His evidence was that this sale was at the fourth auction.
In cross-examination, the appellant agreed with the description of the subject land in the report of the Valuer-General’s valuer, Mr Shaw, which had been provided to him and which became exhibit 5. He stated that he had looked at the four sale properties relied upon by the valuer and did not disagree with the valuer’s description of them. He agreed that there is a second, small house site on the subject land but that it would have no yard and poor access.
Concerning the sale number 1, the appellant was of the view that the pipeline easement over it was not relevant as the pipeline had been shut down years ago. Sale 2 was, he said, too far away from the subject. He put the distance at 22 km while Mr Shaw’s report states 15 km however this discrepancy was not explored by the parties.
The appellant saw sale 3 as a magnificent block, far superior to the subject and not having any problem with flooding. Sale 4 had ordinary power poles, as distinct from the subject, where towers were replaced with the current large towers about three years ago.
The appellant agreed that the 2006 valuation had been reduced from $111,000 to $100,000 on grounds very similar to the present grounds of appeal. He pointed out, however, that the power towers were replaced by the current very large ones in 2007.
The Valuer-General’s evidence
The Valuer-General called Mr Mathew Shaw, a registered valuer and certified practising valuer, who gave evidence in accordance with his report, exhibit 5. He had valued the land by a process of direct comparison with four sales of vacant or lightly improved land.
Sale 1 is located 1 km radially north west of the subject. It has an area of 1.525 ha and is zoned Rural Agriculture. The land sold on 27 August 2008 for $163,000 and $10,000 was allowed for the clearing and fencing which resulted in an analysed unimproved value of $153,000. The valuer applied $124,000 as at 1 October 2009 after making adjustments to accord with the estimated value at that date. It was assessed as inferior to the subject land. Mr Shaw stated that the market was relatively static between the sale date and the date of valuations so a conservative approach has been adopted here, appropriate to a valuation of this sort. There is an easement for the Moonie oil pipeline on the land still but there is no visual impact.
Sale 2 is a 2 ha Rural Residential sale on 1 April 2009. It sold for $125,000 and $2,000 was allowed for improvements. Although the analysed unimproved value was $123,000 the applied unimproved value as at 1 October 2009 was $112,000. It was seen as inferior to the subject. There is a high voltage power easement near the northern boundary. It is slightly smaller than the one on the subject and is further to the rear of the parcel. Mr Shaw states that it is 15 km radially north east of the subject.
Sale 3 is a square shaped 8.347 ha block zoned Rural General. It sold on 28 August 2009 for $250,000. It is fenced and mostly cleared and $20,000 was allowed for that. From the analysed unimproved value of $230,000 Mr Shaw made a reduction to the applied unimproved value of $155,000 as at the valuation date. It is said to be superior to the subject and is 11 radial kilometres north east of it. It does not have any easement over it, is of comparable size with superior access but has a natural watercourse which dissects it. The aerial photo provided shows it without any apparent water in the watercourse at the time the photo was taken.
Sale 4 is a 16.26 ha Rural General zoned block which sold on 17 November 2009 for $265,000. After allowing $66,000 for selective clearing and fencing the analysed unimproved value was $209,000 (I note that mathematically this should be $199,000 so is likely to be an error); $147,000 was applied at the valuation date. This sale is 17 radial kilometres north east of the subject and is traversed by an easement for gas and high voltage power along its western boundary, the shortest side. It is described as superior overall and of comparable size to the subject. This is despite it being twice the size.
Mr Shaw’s evidence was that he acknowledged that sales 2 and 4 particularly were significant distances from the subject but in the absence of nearer sales with similar disabilities to the subject it had been necessary to look further afield.
I note at this stage that exhibit 5 states that the subject land is serviced with electricity, reticulated water and telephone. All four of the sales are likewise described in those respects.
Questioned by the respondent’s legal representatives, Mr Shaw stated that the Dunbar to Benecke Pty Ltd sale in exhibit 2 had been investigated by him. He spoke by telephone to the owner of the company that purchased the land who saw it as a good buy. It has 45 ha of endangered and of concern vegetation, poor access and a power easement on its northern boundary. Mr Shaw was of the opinion that it was a low sale, out of line with the market. He pointed to the area, 101.8 ha, which is much larger than the subject.
Mr Shaw referred to the sale of Goddard to Storey. This property of 55.864 ha sold on 22 October 2003 for $175,000 and was valued at 1 October 2002 at $66,000 unimproved. It has a main house, small dwelling, two large sheds, yards, fencing and a dam. It is particularised in exhibit 2. Mr Shaw saw the sale date as too early to be of use at present.
Mr Shaw was asked to comment on the sale Troy to Troy on 21 September 2004. It is in exhibit 2 and is a sale described as a part sale from wife to husband of 34.62 ha on 21 September 2004 for $202,500. It was valued at $65,000 unimproved at 1 October 2002. He was of the view that its age and the family circumstances of the parties made it of no use for present purposes.
The respondent’s counsel also asked Mr Shaw about the sale in exhibit 2 from Jiona Investments Pty Ltd to Therese Mary-Majella Landers of 80.434 ha for $35,000 on 13 February 2001 when it was valued, as at 1 October 1998 at $57,000. His view was that this sale was too old to be of any use at present.
Turning to the subject, Mr Shaw stated that the power line easement had already been allowed for and the present increase was in line with the sales evidence. Concerning the residential development which the appellant claims intrudes on his privacy, Mr Shaw was of the view that as it is 5 km to the south west it is not intrusive.
In cross-examination, Mr Shaw stated that in the case of rural home sites, smaller blocks sell for more per hectare than larger blocks, all else being equal.
During his cross-examination it was put to Mr Shaw that the subject property does not have reticulated water. He was unable to deny this and accepted it in re-examination. I have previously noted that the valuation was prepared on the basis that the subject land, and all the sales, had reticulated water.
The law
Section 33 of the Valuation of Land Act 1944 deems the valuation to be correct until the contrary is proved.
The court is not an investigating tribunal and must rely on the evidence placed before it. The onus placed on the appellants is not easy to discharge without evidence from a registered valuer.[1]
[1] J.L. and I. Qualischefski & Ors v Valuer-General (1979) 6 QLCR 167 at 172.
The best test of value is to be found in sales of comparable properties in the open market as close as possible to the date of sale.[2]
[2] N.R. and P.G. Tow v Valuer-General (1978) 5 QLCR 378 at 381.
Whilst maintenance of the correct relativity between valuations is of considerable importance for rating valuations, this is not to be preferred to the exclusion of relevant (even if not ideal) sales evidence.[3] In this case the valuer needed to make allowances for sales both before and after the valuation date. The fact of and amount of the allowances made were not disputed.
[3] W.M. and T.J. Fischer v Valuer-General (1983) 9 QLCR 44 at 46.
The Valuer-General should, if possible, obtain uniformity by correcting errors, rather than making an inaccurate assessment in order to have uniform error.[4]
[4] R. and M.M. Barnwell v Valuer-General (1990-91) 13 QLCR 13. See also Thomson v Department of Natural Resources and Mines [2007] QLC 92 at [7], [8] and [12] where Member Scott applied decisions of the Land Appeal Court on relativity.
What is now s.33 of the Valuation of Land Act 1944 was previously s.13(7). The presumption of correctness of valuations made under the Act was considered in Brisbane City Council v The Valuer-General for the State of Queensland.[5] Justice Gibbs, as he then was, in the High Court of Australia, said, at p.56:
“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.”
[5] [1977-1978] 140 CLR 41.
Conclusions - The presumption of correctness
The valuation opinion of Mr Shaw is based on facts and the valuation appealed against is protected by s.33. If however the valuation can be seen on the evidence to be based on a serious error of fact, the presumption in s.33 is rebutted and the Court must then proceed to determine the appeal without that restriction.
In the evidence it became clear that the valuer valued the subject land on the basis that it had reticulated water available to it and compared it to four sale properties, all with reticulated water. Clearly, it would be appropriate to do so. Once it became known, in the course of the hearing, that the subject land does not have reticulated water available, an error of fact was demonstrated. The valuation has been made in part based on an error of fact. The fact was of sufficient weight to the valuer that he presented all four of his comparison sales with, he believed, that fact in common between them. As the evidence unfolded, it became apparent that the appellant has had to look to Flagstone Creek for water and, when the drought made that insufficient, to have a bore put down. The valuer has compared the subject property to four sales with a superior facility.
I am satisfied that a serious error of fact has occurred in making the valuation and that the presumption of correctness in s.33 no longer applies to the valuation.
The lack of reticulated water
At this point, a difficulty arises for the Court as there was no evidence provided of what would be the effect on the valuation of the lack of reticulated water, usually referred to as town water. There was no evidence of the actual cost of the bore, pump, electricity and plumbing connections and so on. The Court must do the best it can to resolve the matter.
The Court of Appeal considered this aspect of the jurisdiction of the Land Appeal Court and the Land Court in Chief Executive, Department of Natural Resources and Mines v Kent Street Pty Ltd,[6] Justice P Lyons, with whose reasons McMurdo P and Keane JA agreed, said:
“[171] The allegation that there was no evidentiary basis for the application of this rate makes it necessary to focus attention on the Land Appeal Court. The composition of that Court includes two members of the Land Court.156 The Land Court is a specialist tribunal,157 whose members have historically been persons with valuation expertise, or lawyers, usually with considerable experience in dealing with matters of valuation and whose work in that Court justifies recognition of their specialist expertise.158 In fact, one of the members who constituted the Land Appeal Court has specialist valuation expertise, as well as legal qualifications. It seems to me that the Land Appeal Court is itself a specialist court, with the capacity to form its own views about matters related to value, and employ its own expertise in coming to its conclusions.159 That this is its intended function is apparent from s 66 of the VLA, which requires the Land Appeal Court, when appeal is successful, to adjust the valuation ‘to the extent necessary in its opinion’ to determine the value correctly in accordance with the VLA. Accordingly, once satisfied that an appeal should be allowed, the Land Appeal Court was entitled to form a judgment about the relativity of the Pacific Fair site to the Chermside site; or to adopt, as it did, the relativity which the Land Court member had applied.
[6] [2009] QCA 399 at [171].
Land Court Act 2000 (Qld), s 58.
157See Land Court Act 2000 (Qld), s 4(1).
158See ISPT Pty Ltd v Melbourne City Council (2008) 20 VLR 447 at [23].
159Cf ISPT Pty Ltd v Melbourne City Council (2008) 20 VLR 447 at [17--[18]; Spurling v Development Underwriting (Vic) Pty Ltd [1973] VR 1 at 11.”
Section 66 of the Act, which applies to this appeal due to s.45(8), gives this power to the Land Court as well as the Land Appeal Court. The Court may reduce or increase the amount of the valuation to the extent necessary in its opinion to determine it correctly in accordance with the Act.
I consider that the subject land has a disability that has not been accounted for in the valuation and would be less desirable in the marketplace without town water being available to it. In the absence of actual costings I consider it proper to allow for the estimated cost of locating a suitable site for a bore and drilling and doing everything necessary to bring it into production, including installing a pump and connecting electricity and plumbing connections and paying incidental costs. I allow $10,000 in total for this. I have no doubt that in future actual costs could be used to arrive at a precise figure. I am satisfied that a purchaser would look to pay a price for this land on the valuation day which takes those costs into account and would be willing to pay this amount less than the valuation because of the need to pay for water to be provided to the land.
The reduction in privacy
The appellants argued that the highset Preston Peak estate, 5 km to the south west, with its street lighting, is an intrusion on privacy which will reduce the value of the land. Clearly, Mr Shaw disagreed, in view of the distance from the subject land. I accept that the development is sufficiently distant that any likely effect will be small and do not propose, on the evidence, to make a reduction for its presence.
The large high voltage line support towers
The evidence was that the large towers shown in the photographs in exhibit 2 had replaced lesser towers in 2007 so that the allowance previously made for this disability was made at a time when smaller towers were in place.
There are two competing approaches here. First it could be said that since the easement has been in place for decades then the market would expect that the powerlines and towers on it would be likely to get bigger with time, as the population increases. This was Mr Shaw’s approach. The contrary view is that one should look at the facts on the ground at the date of valuation and allow for any change.
In the facts of this case, where the actual disability is what can be seen, not just what may be built, I accept that the likely effect on a purchaser would be greater where the towers are in place rather than a potential so that the disability has increased since 2007 when the larger towers were installed.
Again, doing the best that I can, I will allow $5,000 for this as it seems a less serious disability than the lack of town water and its potential to worsen has been realised in recent years.[7]
[7] Cf. Kevin J and Rosemary A Copeland v Chief Executive, Department of Natural Resources. AV98-907, 908 and 909. Land Appeal Court 15/12/2000 at [11]. In that case the facts were that the valuer had been unable to detect any difference in diminution in value between lots affected by existing cables, the potential for future works and where there was a tower on certain land. That was a matter of fact on the evidence in that case.
Electro-magnetic radiation
There was some evidence in regard to this but no evidence from an expert in that field. Exhibit 1 and the aerial photo in exhibit 5 indicate that the house site utilised on the land is several hundred metres from the powerlines.
On the evidence provided, I am guided by the decision of the Land Court in Trevor R. Armstrong v Chief Executive, Department of Natural Resources[8] where, in the absence of clinical evidence and with the use of comparable sales it was accepted that adequate allowance had been made.
[8] AV97-438. Brisbane 4/12/1998 at p.17.
In view of the allowance which I have made for the actual visual impact of the hardware on the easement I am of the view that the evidence does not require a further allowance in respect of electro-magnetic aspects, if any.
In the circumstances of this case I am satisfied, for the reasons given, that the valuation of $135,000 should be corrected by reducing it by a total of $15,000 in order to determine it correctly. Accordingly, the orders of the Court are:
1. The appeal is allowed.
2. The amount of the valuation is reduced to $120,000.
WA ISDALE
MEMBER OF THE LAND COURT
0
2
0