Van Zelderen v Department of Natural Resources and Water
[2009] QLC 21
•17 February 2009
LAND COURT OF QUEENSLAND
CITATION: Van Zelderen v Department of Natural Resources and Water [2009] QLC 0021 PARTIES: Eduard J and Maria A Van Zelderen
(appellants)v. Chief Executive, Department of Natural Resources and Water
(respondent)FILE NO: AV2008/0603 DIVISION: Land Court of Queensland PROCEEDING: An appeal against an annual valuation of land under the Valuation of Land Act1944. DELIVERED ON: 17 February 2009 DELIVERED AT: Brisbane HEARD AT: Atherton MEMBER: Mr RP Scott ORDER: The appeal is dismissed. CATCHWORDS: Valuation of Land Act – s.3(1) provides definition of “unimproved value” – new ideas of value do not displace statute APPEARANCES: The appellants in person
Mr G Smith, Acting Principal Legal Officer, for the respondentBackground
Pursuant to the provisions of the Valuation of Land Act 1944 (the Act) the Chief Executive placed a value on land owned by the appellants in the amount of $255,000 as at a relevant date of 1 October 2007. The appellants objected to and now appeal against that valuation, contending to a valuation of $160,000.
Both of the appellants gave evidence whilst Robert Grant Moroney a registered valuer provided valuation evidence in support of the Chief Executive’s valuation figure. Mr Van Zelderen agreed in cross examination that the subject land, unimproved, could have at the valuation date been sold at the valuation figure determined by the Chief Executive, however Mrs Van Zelderen considered that to be an over optimistic view.
The appellants provided evidence in the form of a statement as well as oral evidence. Much of the appellants case was based on the proposition that the increase of approximately 33% per annum since the date of an earlier valuation was both unsustainable and employed a method not considered to be appropriate. I will first refer to the percentage increase issue by making reference to what the Land Appeal Court said in Tow v Valuer-General.[1]
"It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation."
[1] (1978) 5 QLCR 378 at 381.
The method of valuation proposed by Mr Van Zelderen was that the long term trend over a period of 50 years ought to be employed as arriving at what he described as a “real value”. He said that the long term trend, for an undefined class of real property, had, according to the Australian Bureau of Statistics, been at 3% per annum for the past 50 years. What Mr Van Zelderen proposes is a method not designed to arrive at value in accordance with the provisions of the Valuation of Land Act. Section 3(1) of that Act provides:
"For the purposes of this Act –
'unimproved value' of land means –(a)in relation to unimproved 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;
(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 notion of value has been considered by superior Courts on a number of occasions, including Courts in jurisdictions outside Australia, and its treatment by the High Court in Spencer v The Commonwealth[2] is consistent with a range of cases from other jurisdictions which I have read. In Spencer v The Commonwealth Griffiths J said:
"To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property."
[2] (1907) 5 CLR 418 at 441.
In other words, the task of the valuer (and a Court in the case of an appeal against a statutory valuation) is to ascertain the figure at which the hypothetical parties referred to in Spencer would arrive at in agreeing upon the sale of the parcel of land as at the relevant date.
The evidence of sales of comparable properties to the property being valued has been held on many occasions to provide the best basis for determining land value. That method was referred to as “the conventional valuation technique” in Riverbank Pty Ltd v Commonwealth (1974) 48 ALJR 483 at 484; and as “the most direct method” in Bickle v Commissioner of Main Roads (1961) 7 LGRA 155 at 159.
Although promoting the idea of striking a figure based on the long term trend of land value, the appellants apparently recognise the role that sales evidence plays in valuing land and in their written statement provide a list of six sales. Three of those sales took place in 2004 in circumstances whereas Mr Van Zelderen agreed land prices “sky rocketed” during 2007. In such circumstances reliance upon sales from another market period ought not to be relied upon in striking a value as at 1 October 2007. Similarly, a sale that took place in May 2006 is too far removed from the date of valuation according to the evidence of Mr Moroney who employed sales nearer to the relevant date. Mr Moroney also pointed out that a “sale” referred to by the appellants as having occurred in July 2005 actually involved an exchange of land between neighbours associated with a reconfiguration of property boundaries. That transaction does not therefore supply a suitable basis for valuation.
Mr Moroney also referred to the last sale mentioned by the appellants; namely, that of the 70 ha property in East Evelyn Road Millaa Millaa for $200,000 in October 2007. Mr Moroney said that the Millaa Millaa transaction in fact resulted from a request by the landholder to the Department of Main Roads to purchase the balance land following an earlier resumption: the request being made on the grounds of hardship. I accept Mr Moroney’s evidence that that sale property ought not to be accepted as representing a test of value of the type described by the High Court in Spencer v The Commonwealth.
Mr Van Zelderen said that the sales properties referred to by Mr Moroney ought not be accepted as they represented the prices paid for properties in a “housing bubble”. The task of the valuer is that of striking a value as at the relevant date of 1 October 2007 having regard to the market that existed at that time. It does appear to be the case that the values prevailing at that time resulted from a rapid escalation of sale prices during the preceding year, but there was no evidence to say that any of the four sales referred to by Mr Moroney were other than arms length transactions taking place in an operating market.
Mr Van Zelderen argued that if property values were to increase at the rate they had in recent times the appellants would not be able to afford the local government rates that would apply based on those values and that not only they, but other landholders, would have to relinquish their properties. There are two points I would make about this.
First, the Land Court is charged with the responsibility under the Valuation of Land Act of determining appeals with respect to land values struck in accordance with that Act. It is not a rating tribunal nor is it a tribunal concerned with the consequences of determining a particular value. The value must be struck in accordance with principle (to which I have referred above) and without regard to the impact that a particular value will have on the rating or any other taxation level.
Second, if it transpires that the market as at 1 October 2007 was indeed a “bubble” market then, quite clearly, prices of land and statutory valuations will decline once the bubble bursts. In those circumstances landowners will gain the benefit, if any, of reduced valuations. Of course, the level of rates payable with respect to a particular property does not depend exclusively on the value of land, but depends upon the level of rates determined as appropriate by the local authority who might employ land value for the purpose of maintaining an appropriate relativity of the rating burden amongst landowners. I might add the further observation that were it the case that rates were to be increased to a level that led to landowners relinquishing their properties then, clearly, the market, if not the local authority, would recognise this trend and would adjust accordingly.
There was a concern expressed by the appellants that Mr Moroney might have valued their property as improved, at least in part, having regard to improvements that they had placed on the property. I heard Mr Moroney’s oral evidence and perused his valuation and concluded that this was not the case and that he had properly valued the property as unimproved in accordance with the requirements of s.3(1)(b) of the Valuation of Land Act. His approach was to analyse sales that were only lightly improved to identify the unimproved land component value of the sale properties and then to compare those sales properties to the subject land on the same unimproved basis. Mr Moroney did not however disregard the improved environment in which the subject land is located, but had regard to the various services and other facilities which form the relevant environment impacting upon the subject land. That approach is authorised by Tetzner v Colonial Sugar Refining Co Ltd [1958] AC 50 at 52, 155.
The appellants complained that Mr Moroney had not visited the subject land prior to the valuation appealed against being struck by the Chief Executive. Mr Moroney described how he employed the mass appraisal technique though said he had visited the subject property in about 1990 to 1991. The mass appraisal technique is the method commonly employed by the Chief Executive in adjusting statutory land values having regard to research which indicates movements in the market place. It would be both impractical and economically irresponsible if the Chief Executive conducted physical inspections for all of those properties in this State valued under the annual valuation system. Mr Moroney did inspect the property following the lodgement of notice of appeal by the appellants in order to refresh his memory of the features of the land. He was not challenged as to the description of the subject land in his valuation which I accept as having not been disturbed by the evidence from the appellants.
Mr Van Zelderen complained that an earlier valuation of $109,000 was also too high. The issue of that valuation has not properly been brought before the Court by the processes of objection and valuation provided for in the Valuation of Land Act. Accordingly, it is not a matter which I intend to address.
A valuation by the Chief Executive is, pursuant to s.33 of the Act, deemed to be correct until proved otherwise upon objection or appeal. Section 45(4) of the Act provides that the burden of proving any and every ground of appeal shall be upon the owner. I have considered the various points raised by the appellants and conclude that they have not demonstrated that the valuation by the Chief Executive is in error. Accordingly, the appeal is dismissed.
RP SCOTT
MEMBER OF THE LAND COURT
2
0