Vonhoff v Department of Natural Resources and Water

[2008] QLC 140

[2008] QLC0140
AV2007/0221

IN THE LAND COURT OF QUEENSLAND

BEFORE MR RS JONES (Member)

SOUTHPORT, 23 JUNE 2008

(Copyright in this transcript is vested in the Crown.  Copies thereof must NOT be made or sold without the prior written authority of the Registrar of the Land Court.)

In the matter of an appeal against a valuation
Property ID:              612943
Local Government:    GCCC - Albert

Joanne & Darren Vonhoff
v.
Chief Executive, Department of Natural Resources and Water

EX TEMPORE

MR JONES:  I intend to give my reasons now but I reserve the right to tidy them up in due course. When I say tidy up I mean just tidy up in the sense of perhaps making them read a bit more sensibly but the substance will remain unaltered.

This appeal concerns land located at 75 Golden Valley Road, Tallebudgera Valley and is more properly described as Lot 105 on Registered Plan 224473 Parish of Mudgeeraba, County of Ward.  The land is located approximately 20 kilometres south from the Southport Central Business District and is located within a rural residential subdivision environment.  The land is 5,100 metres square in area and under the Town Planning Scheme for the City of the Gold Coast is designated “Park Living”.  Consistent with that designation the land was being utilised at the date of valuation for rural residential purposes and it has been improved with a low set brick dwelling, swimming pool, storage sheds and landscaping. 

The appellants have appealed the respondent’s assessment of the unimproved value of the land determined as at 1 October 2006 effective 30 June 2007 in the amount of $295,000.  In their Notice of Appeal the appellants’ estimate of the unimproved value of the land is $235,200.  The appellants were represented by Mr Sneyd, Ms Vonhoff’s father.  Ms Vonhoff is one of the appellants.  The respondent was legally represented by Mr G Smith a principal legal officer employed by the respondent and relied on the evidence of Mr K Brown a registered real estate valuer also employed by the respondent.  I should point out here that at the time the valuation was actually carried out, that is when the actual assessment of the unimproved value of the land was determined, Mr Brown was not a registered valuer.  At that time he was an assistant valuer working under the supervision of a senior valuer of the department.  By the time Mr Brown prepared his report in these proceedings, Exhibit 2, he was a registered valuer.  Not much turns on this but I thought it worth clarifying.

In appeals such as these there are some general principles which apply. The first of these is that pursuant to s.33 of the Valuation of Land Act [1944] the appellants have the burden of proving that the valuation appealed against is wrong. The statutory valuation is presumed to be correct.  Further, pursuant to s.45 of the Act the burden of proving every ground of appeal relied on lies with the appellants. The presumption in favour of the correctness of the statutory valuation may be rebutted where it can be shown that the valuation is based on a wrong principle and/or involved a significant error of fact and/or was made by a fundamentally erroneous method.  Authority for these propositions can be found in cases such as Brisbane City Council v. Valuer-General 140 CLR 41 and Cominos & Co. Pty Ltd v. Chief Executive, Department of Lands 16 QLCR 311.  It has also been said on a number of occasions by this Court and the Land Appeal Court that, generally speaking, the best evidence of the unimproved value of land is that of sales of vacant or lightly improved comparable parcels of land.  An example of this is the Land Appeal Court decision in Clough v. Valuer-General 8 QLCR 70.

In this appeal it is alleged on behalf of the appellants that the valuation of the respondent is fundamentally flawed.  In the notice of appeal, under the heading “Grounds of Appeal”, the grounds are stated in the following terms, “An increase of 40.5% does not reflect the actual increase of only 12% in our area.  Market evidence does not reflect the decision of the Director General for properties of similarity.  This information was sourced and published by the Department in the Gold Coast Bulletin.”

The appellants called no expert evidence on their behalf, instead they relied on the evidence of Ms Vonhoff.  In support of their appeal a statement was tendered, Exhibit 1.  In brief form the issues raised in this statement are: first, the sales evidence relied on by the respondent is unreliable and is not otherwise truly comparable to the subject land for various reasons including stormwater issues, erosion, flooding, water damage, access and views; second, the respondent has failed to take into account the overgrown status of the subject land which provides refuge for vermin including snakes; third, the respondent had failed to take into account the altered watercourse caused by construction in the area which deleteriously affects the subject land; fourth, generally speaking weed infestation on the land is out of control. 

I think it would be fair to say that of all the matters raised it is really the question of the impact of stormwater, erosion and not infrequent flooding of the subject land which was the main concern of the appellants and the main source of differences sought to be made between the subject land when comparing it with the sales evidence relied on by Mr Brown.  In that context Ms Vonhoff gave evidence that, depending of course on the various seasons that arise from time to time, up to 20 to 25 occasions per annum water in the watercourse area reaches up to knee height and about once a year water levels reach chest height.  There was no dispute taken with the nature and extent of the flooding issues and drainage issues raised by Ms Vonhoff.

Mr Brown in his evidence said that he had taken into account the matters raised by the appellants when assigning the unimproved value to the land.  However, as it turned out at the time he assigned the unimproved value of $295,000 to the subject land he had not physically inspected the land.  He had of course inspected the land by the time of the preparation of his report Exhibit 2 was prepared but not at the time of the actual assessment of the unimproved value.  This is a matter of some concern as there is always the risk that any subsequent valuation will be influenced by the existing valuation.  That is there might be a tendency to lean towards defending the existing valuation rather than looking at the matter afresh and objectively with the benefit of the inspection.  It is my opinion that an element of this exists in the evidence of Mr Brown in this context.  Mr Brown readily conceded that the neighbouring block which had the same unimproved value of $295,000 attributed to it was, save for the stormwater and erosion issues, materially the same as the subject.  He acknowledged that some adjustment ought be made to take into account these differences.  However, his solution was not to decrease the unimproved value of the subject land but to increase the unimproved value of the adjoining parcel of land from $295,000 by $5,000 to $300,000.  This is an increase of only some couple of percentage points.  This evidence it seems to me was more reactive than the result of any considered analysis of the issues involved. 

However, Mr Brown did have regard to three sales in reaching his conclusion about the unimproved value of the land and I should point out that consistent with the authorities these sales are only lightly improved.  The first of these sales was at 19 Stockyard Court and it sold for $410,000 on 15 February 2006.  It contained an area of 6,362 square metres.  It was considered superior to the subject by Mr Brown.  An allowance of $10,000 was made for some limited improvements which are set out in Exhibit 2 and I don’t see the need to repeat here.  The second sale was located at 456 Tallebudgera Creek Road.  It sold on 28 October 2005 for $680,000.  Again there was an allowance of some $14,000 for improvements.  These improvements were only slight and again I do not see any need to repeat what they are here.  It was also considered superior to the subject.  This particular sale was some 10,710 square metres in area.  That is more than twice the size of the subject land.  The third sale is located at 40 Golden Valley Road.  It contains an area of 5,200 square metres and sold for $275,000 on 16 June 2005.  I’ll say more about this sale in a moment but again there was a small allowance of some $15,000 for improvements which are set out in Exhibit 2 which I won’t repeat here.

The appellants provided no sales evidence in support of their assessment of the unimproved valuation of the land, but in my opinion Ms Vonhoff in her oral evidence and in her statement Exhibit 1 raised a number of significant matters concerning the reliability of the sales evidence relied on by Mr Brown.  On balance in respect of each of these sales I am of the view that sale 2 is not a truly comparable sale and does not provide any reliable evidence of value for a number of reasons including shape and area.  However, the main thing that distinguishes this sale from the subject is that the respondent has attributed an unimproved value to this parcel of land of more than 100% of that attributed to the subject land and Mr Brown’s sale 3 which is located in the same road as the subject.  In all the circumstances I did not consider this sale provides any reliable evidence of value.  In saying this this is not a criticism of Mr Brown.  As Mr Smith said Mr Brown can only work with the evidence he has available to him. 

In respect of Mr Brown’s sale No. 1 I accept that this sale provides some evidence of value of the subject land.  As Mr Brown said it is superior and to a material extent. This is borne out by the unimproved value which is attributed to this block of $400,000, a value significantly above that attributed to the subject land and sale 3.  This difference in value is no doubt a function of the location of this land which, on my understanding of the evidence of Mr Brown, is a materially superior location to that of the subject.  I should point out here that this sale is significantly affected by water as evidenced by the photographs at pp.13 and 14 of Exhibit 2, but of real importance here is that water which affects this sale is relatively static and therefore does not cause the erosion problems which affect the subject land.  Overall it is my opinion that this sale has only limited use and that is of setting an upper level of unimproved value which the subject land could not exceed. 

In respect of sale 3 it is my opinion that this sale provides the best evidence of value.  It is in the same street as the subject, of the same zoning or land use designation, is only 400 metres to the east of the subject and is the same area within 100 square metres.  There are however some material differences between this sale and the subject.  The sale is more elevated than the subject and has superior views albeit if only of a limited rural nature. However, with this elevation comes access difficulties.  In this context I accept the evidence of Mr Brown to the effect that access to this block is so difficult that the most efficient way of gaining access is via an easement through the adjoining parcel of land rather than via Golden Valley Road.  I also accept that some earthworks are required for building on this site.  However, in this context the evidence of Ms Vonhoff was to the effect that these works would not be significant and her evidence on that point was not seriously challenged.  More importantly however this site does not have the stormwater and erosion issues as those that affect the subject.  In his report Exhibit 2 at p.18 Mr Brown says about sale 3 in comparison to the subject land under the heading Remarks, “The sale is considered superior to the subject in terms of land size; comparable in location and shape; substantially inferior in access and topography.  Overall, the sale is considered inferior to the subject.”  While I accept most of what Mr Brown says I disagree with his comments concerning topography.  It is my view that Mr Brown has tended to significantly under-estimate the difficulties associated with the subject land concerning stormwater runoff and erosion.  On balance it is my opinion that the relative positives and negatives associated with these parcels of land would tend to roughly cancel each other out, that is the access and building difficulties associated with sale 3 would tend to be cancelled out by the superior views and lack of stormwater and erosion problems when compared to the subject.  In my view it follows from what I have said that I think that the unimproved value of the subject land should, by reference to this sale, bear a high level of comparability to the analysed value attributed to it.  That is, in my opinion, the unimproved value of the subject land should not materially exceed the analysed value attributed to sale 3 which is $260,000.

Doing the best that I can with the evidence before me I have concluded that the unimproved value of the subject land should be reduced by in the order of 10%.  A 10% reduction produces a figure of $265,500 which I intend to round off to $265,000.  For the reasons given the orders of the Court will be (1) the appeal is allowed; (2) the unimproved value of the subject land is determined as at 1 October 2006 in the amount of $265,000.