Wang v Chief Executive, Department of Natural Resources and Mines - [2002] QLC 14

LAND COURT

BRISBANE

28 February 2002

Re: Appeal against annual valuation

Valuation of Land Act 1944
  Property ID No:        9116824
  Local Government:    BCC-Yeerongpilly
  (AV2001-0170)

Sheng Chin Wang

Chief Executive, Department of Natural Resources and Mines

J U D G M E N T

Background:

This matter relates to land at 52 Turton Street, Sunnybank, and described as Lots 14 and 15 on RP 4920, Parish of Yeerongpilly. The subject land has an area of 2,099 m² and is located about 15 kilometres radially south-east of the Brisbane GPO, and 500 metres south-west of the main Sunnybank district shopping centre at Mains Road and McCullough Street. The subject land is a corner parcel fronting Turton and Boorman Streets, both of which are bitumen sealed with concrete kerbing and channelling. Access to both streets is good, and the subject land was zoned Residential A under the Brisbane Town Plan of 13 June 1987, effective at the date of valuation of 1 October 2000. The new Brisbane City Plan took effect from 30 October 2000, under which the subject land is classified as low density residential. The City plan was effective at the subsequent issuing of the notice of valuation. The key issues are the impact of traffic and noise, relativity, changes in the valuation and comparison of sales.
On 26 February 2001 the Chief Executive issued a valuation of the subject land at $190,000. Following an objection the Chief Executive confirmed that figure on 29 May 2001. The appellant has now appealed on 22 June 2001 claiming the unimproved value should more properly be $135,000. Following a court supervised Preliminary Conference the matter came before the court for hearing on 20 November 2001.
Dr Sheng Chin Wang appeared and gave evidence on his own behalf, also calling evidence from his father Hsuing Wang. Ms R Trigge, Senior Legal Officer, appeared for the respondent, calling evidence from Ross Iain Wilson, the departmental senior registered valuer responsible for determining the valuation.
The evidence:
The nature of the land -
The subject land is a rectangular corner parcel with frontages of 50 metres to Turton Street and about 40 metres to Boorman Street. The land is used for the purpose of a single dwelling house, and has been valued for that purpose under section 17 of the Valuation of Land Act 1944 (the Act). The land is also close to a small local shopping centre at the corner of Station Road and Turton Street. The subject land is opposite the Sunnybank High School, which fronts Boorman, Turton and Gager Streets.
There is a bus stop in front of the adjoining parcel to the east of the subject land (Lot 16); and also a bus stop about 50 to 100 metres to the south down Boorman Street. Those buses are used both morning and afternoon by students. The Boorman Street bus turns right into Turton Street passing the subject land on both frontages.
Dr Wang argues that there is a greater concentration of student activity associated with the school entrance in Boorman Street, than at either the Turton Street or Gager Street gates. However he agrees that students do congregate near the sporting facilities in Gager Street. Dr Wang notes that the main school entrance in Turton Street tends to be used by the teaching staff. The Boorman Street entrance is also used spasmodically when the school’s arts complex is used for cultural activities on special occasions. For those reasons Dr Wang argues that noise and traffic is worse in Boorman Street. Dr Wang has a very good knowledge of school activities, himself being a student leader of that school. Dr Wang has also personally resided on the subject land since 1993.
There is also a bowls club facility adjoining the high school at the corner of Turton and Gager Streets. That facility (the Sunnybank Bowls Club) is regularly used by bowls club members, and has flood lights for night bowling purposes. The bowls club also impacts parking nearby, and parking restrictions are enforced in adjoining streets.
It is agreed that street signs limit parking in Boorman Street during school hours between 7 am and 9 am and 2 pm to 4 pm, although Dr Wang agrees that some drivers ignore those instructions in the absence of any monitoring of parking by police. Mr Wilson concedes those restrictions, but argues that outside of school hours, parking is not regulated, and a prudent buyer of lands in that market sector would, in his opinion, be unlikely to see those restrictions as a major encumbrance. However Mr Wilson agrees that school drop-off and pick-up of students in Boorman Street is a matter that should be considered in valuing the land.
In respect of the impact of the bowls club activities, Mr Wilson sees those to be more intensive, particularly at evenings and on weekends, as the bowls club is a large well patronised facility.
Mr Wilson also concedes that the school students tend to litter the footpath outside the subject land, but argues that similar impacts occur near his Sales 1, 2 and 4, and he has therefore considered those impacts in his valuation of the subject land. Dr Wang also advises that personal mail is stolen from the letterbox of the subject land, thus causing personal concern about privacy. However there was no evidence as to whether similar occurrences did not occur at other properties in that locality. Mr Wilson sees those nuisance problems as similar at the sale properties used in his comparisons.
Dr Wang concedes that it is difficult to place a monetary value on the impact of the environmental nuisance experienced on the subject land, but argues that some allowance should be made for those disabilities. Dr Wang agrees that traffic noise and student activities are similar outside the adjoining Sale 4, and the subject land, but argues that those impacts are less outside Sale 1 in Turton Street and Sale 2 in Pember Street.
In respect of any physical encumbrances upon the subject land, Mr Wilson provides a copy of a Brisbane City Council Bi-Map which demonstrates that there is no registered sewerage easements extant. The subject land is serviced by underground sewerage at a single point along the southern boundary. However Dr Wang notes that sewer point services only Lot 14, while there is no extension to Lot 15 to its north. He notes that if the two lots were to be developed as separate parcels, then an extension of that sewer line would be required, which would then further impact the subject land. Ms Trigge argues that the two lots have been valued as a single parcel under s.17 of the Act. .
While conceding that noise and student behaviour does exist outside the subject land, Mr Wilson argues that any redevelopment of that land would minimise the impacts by suitable location of the dwelling on the subject land, due to its larger than normal size of 2,099 m².
In respect of whether Council approval might be forthcoming for any possible demolition of the existing building upon the subject land, it is agreed that the building has no “character housing” listing by the Council which might otherwise prevent such actions. Mr Wilson advises that due to the lack of existing vacant lands in Sunnybank, there is now developing a steady growth of properties where an existing building has been removed to make way for a new dwelling. Indeed that has occurred on several of the sales discussed later. Mr Wilson argues such demolitions are common in the older closely settled areas where demands for sites are high, such as Sunnybank, Coorparoo and Balmoral. Mr Wilson argues that new homes have recently been built in Newber Street (Lots 37, 38, 40 and 65) and also in Boorman Street (the adjoining Lot 13).
Changes in the value -
Dr Wang argues that the recent increase in the unimproved value of the subject land (15.2%) is out of line with overall economic growth and inflation figures in the community (i.e. gross domestic product), and also with increases evident in surrounding areas. He refers to public comments from local political representatives, who advise that an overall increase of only 10% for the Sunnybank area, is reported from records provided elsewhere by the respondent department for the relevant period. Dr Wang also notes that the current 15.2% increase is inconsistent with the previous record of relatively stable unimproved value since 1993. Mr Wang provides records revealing that the unimproved value of the subject land was $157,000 from 1993 to 1997, rising by 5% to $165,000 in 1998, and 1 October 1999, and then the recent increase to $190,000 (15.2%) at the current valuation.
To support his conclusion that the respondent has made an error in the valuation, Dr Wang provides records of the sale and resale of the adjoining property at 55 Boorman Street (Lot 13). That property sold in June 1993 for $182,000, and the property was subsequently improved, which together with legal costs and stamp duty, which collectively amounted to a further $5,901, concluding a total cost of $187,901 investment in that property.
Mr Wang senior notes that property subsequently sold in September 2000 for $191,500. He argues that after allowing for agent’s commission and the Goods and Service Tax (GST) at a cost of $5,761, the investment reveals a loss of $2,162 over the period 1993 to 2000. Dr Wang argues that is inconsistent with the projected increase of 15.2% for the subject land. Mr Wang senior provides detail of receipts to support that conclusion. (Exhibit 7)
Mr Wilson rejects that reasoning, arguing that comparisons on that basis are entirely fallacious. Mr Wilson advises that evidence of market transactions supports an increase for residential properties in parts of Sunnybank at from 10% (east of Mains Roads), to 15%, 20% and up to 27% on some of the larger properties. By comparison he notes that some of the major shopping centre retail properties had remained unchanged during that same period. Because of the large multi-million dollar unimproved land values of those retail lands, any averaging process across the suburb would be severely distorted from the individual levels in the sub-market areas of Sunnybank. Mr Wilson argues that the quoted “average values” by the political representatives, reflect average land rises, and are not just residential land values. He further argues that reliance upon percentage increases is not a reliable method of assessing the unimproved value of the subject land.
As further support for his estimate of the unimproved value of the subject land, Dr Wang provides a record of a sale of a half share of the subject land to the appellant in February 2000. The estimate of value of that property, on advice from a local real estate agent, was $230,000. Dr Wang apportions the value of the improvements, including a dwelling, landscaping and swimming pool, at $95,000, with the balance of $135,000 being the land component. Dr Wang does not explain how he arrived at his apportionment, and Mr Wilson rejects such an approach as unreliable, and inconsistent with surrounding sales of lands. Mr Wilson argues that approach makes inappropriate conclusions about the added value of those improvements.
Dr Wang however advises that recent advice from a local real estate agent indicates a likely selling price for the subject land at no more than $400,000, certainly less than their asking price of about $500,000. Mr Wilson agrees with that likely market value in the vicinity of $400,000 for the land only, rejecting any residual value for the improvements.
Dr Wang also advises that he had the subject land valued by an agent for mortgage purposes about mid-2001 at $300,000. However he concedes that valuations for mortgage purposes are conservative by nature.
Relativity -
In support of his estimate of the unimproved value of the subject land at $135,000, Dr Wang notes that the adjoining parcel at 50 Turton Street (Lot 16) is valued at only $140,000. He notes that compares for an area of 1,045 m² (Lot 16) with an unimproved value of $154,000 for 55 Boorman Street (Lot 13) of area 1,012 m². Dr Wang argues that constant relativity between parcels is important for rating purposes and the apparent inconsistency of the above comparisons, reduces confidence in the reliability of the valuations.
Mr Wilson rejects those comparisons, noting that while Lot 16 above has a slightly larger area, it is lower in elevation, is an inferior shape, with narrower frontage and greater depth. He also notes that it is more subject to greater traffic noise along Turton Street, compared to the quieter Boorman Street. Mr Wilson argues that the current values of $140,000 (Lot 16) and $154,000 (Lot 13) reflect those disabilities.
Comparison of sales -
Dr Wang provides two sales to support his estimate of unimproved value of the subject land, being the sale in 1993, and the resale in 2000, of the adjoining property at 55 Boorman Street (Lot 13). As noted previously the purpose of the most recent sale of that property at September 2000 for $191,500, was to demonstrate, in Dr Wang’s opinion, an error in Mr Wilson’s use of that sale. Dr Wang notes that the sale price was for an improved property with an existing brick dwelling, and not for vacant land as assumed by Mr Wilson.
To support his conclusions Mr Wang senior advises that the new owners of 55 Boorman Street (Meng C Liao) initially resided in the old dwelling for a short period after purchasing the site, and then moved to their other premises in Turton Street. The old dwelling was then rented for about a year until it was finally demolished on 9 August 2001. Mr Wang senior argues that because the old dwelling had been occupied for about a year after purchase, he believes that the new owners saw some value in the old dwelling, and the price paid ($191,500) should reflect both the land and the dwelling value. He notes that the date of purchase at September 2000 is very close to the date of valuation of 1 October 2000. He also notes that at the date of effect of the current valuation at 30 June 2001, the demolition had not yet occurred. Dr Wang concludes that it had not been the intentions of the purchaser to demolish the old dwelling when the sale was completed.
Dr Wang further argues that it is not appropriate for the respondent to adopt some isolated sales, where purchasers may have paid a high price for a property, and then to translate those sales across all other properties in the area. He notes that Sunnybank has been a long established and developed area, and sales of vacant lands are not very common. He further argues that the use of sales of land is not the best method of establishing the unimproved values, and greater reliance should be placed upon other economic indicators as noted previously.
To support his valuation Mr Wilson provides the following sales of vacant lands:

Sale 1 – (126 Turton Street – Lot 1 on RP 82544). This is a 642 m² Residential A parcel located about 270 metres west of the subject land. The sale is seen as in a superior location due to its further distance from the school, and closer proximity to shops at the corner of Turton and Station Roads. However due to its much smaller size the sale is seen as overall inferior to the subject land.

The sale sold in December 1999 for $140,000, was analysed at $142,000 due to demolition of an old dwelling, and was applied at $130,000.

Sale 2 – (1 Pember Street – Lot 1 on SP 133584). This is a 451 m² Residential A parcel located about 200 metres north-west of the subject land The sale is one lot removed from the corner of Turton and Pember Streets, and opposite the Sunnybank Bowls Club at the corner of Gager and Turton Streets. The sale is much smaller than the subject land and is seen as inferior. The sale is seen as reflecting the minimum value applicable in that area.

The sale sold in November 2000 for $110,000, was analysed at $109,000, and applied at $104,000.

Sale 3 – (204 Station Road – Lot 4 on RP 101107). This is a 1,011 m² Residential A parcel located about 600 metres west of the subject land in a superior position, handy to shops and without any impact of school activities. The sale is much smaller than the subject land, and while overall is seen as superior, due to the much larger size of the subject land, its unimproved value is seen as lower than the subject land.

The sale sold in June 2000 for $188,000, was analysed at $184,500, and applied at $180,000.

Sale 4 – (55 Boorman Street – Lot 13 on RP 4920). This is a 1,012 m² Residential A parcel adjoining the subject land to the south. The sale suffers from similar impacts of noise and traffic as the subject land, and is seen as inferior due to its much smaller size.

The sale sold in September 2000 for $191,500, and was analysed at $178,000, and applied at $154,000.

In analysing the common Sale 4, Mr Wilson disagrees with Dr Wang as to whether the purchasers of 55 Boorman Street saw any long term value in the old dwelling existing at the date of sale. His advice from the selling agent of that property was that the purchasers had bought the land as an investment, and already owned another dwelling in Turton Street at the time of sale. Mr Wilson’s conclusion is that the subsequent demolition of that old dwelling to make way for a new dwelling, now almost completed, supported his understanding that the value lay in the land.
Mr Wilson argues that any interim rents received from tenants really only reflects holding costs, common in such types of activity. Mr Wilson also notes that those rents were only likely to have covered the approximate costs of subsequent demolition of the dwelling, which on average represents between $4,000 to $6,000, and is common now in Sunnybank. He notes that demolition of old dwellings also occurred at all of his sales.
To support that general pattern Mr Wilson also notes a further sale adjoining his Sale 1 at the corner of Gager and Turton Streets (Lot 2). He advises that sale involved an old derelict house which was subsequently demolished. That sale was for a 637 m² site, and cost $150,000 in December 1999.
In his analysis of the sale at 55 Boorman Street (Sale 4), Mr Wilson has allowed for improvements including an elaborate decorative front fence. He now advises that fence has also subsequently been demolished as part of the construction of the new dwelling. Mr Wilson argues that had he made full allowance for the removal of the front fence, then the analysed and applied values of 55 Boorman Street may well have been higher than the figures he has adopted. He believes that supports the conservative nature of his application of that sale to the subject land. He estimates a fresh application of Sale 4 might reflect $175,000, instead of the $154,000 now relied upon.
In comparing his Sale 2 (1 Pember Street), Mr Wilson notes that parcel also adjoins a large block of units to the rear boundary. He argues that such proximity to multi-unit living apartments is usually seen as a disadvantage for single dwelling sites. However he concedes that in that area, due to the high demand for home sites, the units were not likely to have had a major impact upon the selling price. Mr Wilson also rejects any comparisons with his sales on a pro rate per square metre basis, arguing that house sites are purchased on a site basis, and not a per square metre basis.
In support of his use of the sales where an old dwelling has been demolished, Mr Wilson advises that he only adopts such sales where there is ample evidence of a trend in the market place. Mr Wilson advises that he seeks always to try and assess the intentions of the purchaser in such sales, and he tends to take a conservative approach in analysing those sales. Ms Trigge also argues that in matters where there is some uncertainty, then the onus is upon the appellant to prove their case.

Decision:

The nature of the land -

There is basic agreement that the subject land is a good quality corner parcel used under s.17 of the Act as a large single dwelling site. While the land comprises two separate lots, (Lots 14 and 15), the land must be valued as a single large site with no provision allowed for a higher purpose such as two separate sites. That is directed by s.17 which states:
“17(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made.”

It is also agreed that the problems of noise from student activities and passing traffic are a disability. I accept that such impacts may be more intense at the subject land than at either of Mr Wilson’s Sales 1 and 2, however I feel similar trends would be evident at Sale 4. I accept that the Sunnybank Bowls Club was likely to cause similar impacts at Sales 1 and 2 as at the subject land. However I would agree with Dr Wang that the type of activities of the older bowls players was likely to be less intrusive by nature, due to the greater maturity of the older participants compared to the youth from the school.
In respect of any potential impact from an extension of the existing Council sewerage system, I note that s.17 of the Act precludes any consideration for that purpose. I note also that in assessing the unimproved value of the subject land, s.3(1) of the Act relevantly directs:
“3(1). For the purposes of this Act –

‘unimproved value’ of land means –

(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.”

Changes in the unimproved value -

I note Dr Wang’s concern that the percentage increase in the unimproved value does not align with some community projections. I note also Dr Wang’s concern that the large percentage change in the value (15.2%) is inconsistent with previous determinations by the Chief Executive.
While I am aware that such percentage rises in values are often of concern to appellants in seeking to have confidence that their personal property has been fairly treated in any valuation, they in fact do not prove conclusively that any error has been made in the valuation process. Such rises may, at best, be an indicator to owners that they should further investigate the valuation, but there may be many reasons why a valuation has changed at what would appear to be a rate out of line with some overall statistical percentage.
This matter has been considered many times by the Courts, and I note from precedents that a large increase in itself is not evidence of some error in the valuation. I note, for example, in the decision of NR and PG Tow v Valuer-General (1978) 5 QLCR 378 where the Land Appeal Court said at page 381:
“It follows that a large increase over and above the previous valuation is itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation.”

That matter was also considered in CH and BD Henricks v The Valuer General (1983) 9 QLCR 59, where in the Full Court of Queensland, Macrossan J (CJ) said at page 63:

“The appellants also relied upon a schedule, exhibit 4 in the Land Appeal Court, which shows percentage increases in the value applied by the Valuer-General to a number of selected parcels of land from the date of the preceding valuation up to the March 1979 valuation. The percentage increase shown in the selected case was in each instance considerably less than the increase applied to the subject land as between the two valuation dates. The weakness in such a selective comparison is obvious as there could be any number of reasons why blocks in the same valuation area should increase at different rates over a period of five years.”

As the Full Court said, there could be many reasons why parcels of land can increase at different percentage rates over a period of time. The real test is not the percentage increase in the unimproved values, but a comparison of the subject with sales of comparable sites in the vicinity of the subject at the time of the valuation.
In the matter of whether the Chief Executive should make greater reliance upon other statistical evidence, I note that it is the market value of the land, devoid of any improvements, which is to be determined. The long held test of “market value” was established by the High Court of Australia in Spencer v. Commissioner of Australia (1907) 5 CLR 418, where Griffith CJ said at p.432:
“In my judgment the test of value of land is to be determined, not by enquiring what price a man desiring to sell could actually have obtained for it on a given date, i.e., whether there was in fact on that day a willing buyer, but by inquiring ‘What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?’”

The test to be applied in determining that value was further clarified in Spencer by Isaacs J at p. 441.
“To arrive at the value of the land at that date, we have … 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.”

There is a common misconception that the Consumer Price Index (CPI) provides a reliable measure of increases in the market value of lands. However the CPI figure, which is widely publicised throughout the community, is no more than a statistical representation of the quarterly changes in the price of a basket of goods and services available. That basket includes eleven main groups including food, alcohol and tobacco, clothing and footwear, housing, household furnishings, health, transport, communication, recreation, education and miscellaneous items. There is no direct links to movements in the value of land. While CPI changes are used to measure trends in inflation in the community, it has no direct correlation with the market for land.
Now a thorough understanding of community statistical criteria may be seen to be helpful in understanding the market forces existing in the community. However it does no more than seek to measure the various factors influencing the minds of buyers and sellers who seek to arrive at a figure at which both parties agree to transfer the ownership of the land.
That was clearly defined in the respected text of Land Valuation and Compensation in Australia, 4^th edition by Rost and Collins (1993), which notes at p. 37:
“Viewed broadly, the value of land, particularly urban land, is created or enhanced largely by the provision of public works and utilities, transport facilities, industries, community settlement, and favourable economic conditions. The market value of individual parcels of land is, however, determined in the market by buyers and sellers. The land valuer, by analysing transactions is in a position to interpret the market and to make valuations based on sales data.”

The importance of using comparable sales to determine the market value of land was addressed in Brewarrana Pty Ltd v Commissioner of Highways SA(No. 1) (1973) 32 LGRA 170, where Wells J said at page 179:
“It is general valuation practice for sales characterized as comparable sales to be used as bases for the valuation of lands said to be similar. But allowances must always be made before such sales can be so used. No two parcels of land are identical in all respects: the sale price of any given piece of land is not necessarily the price at which it ought to have been sold, or the same thing as its true value. … Adjustments must, of course, be made every time reasoning of that kind is undertaken. For example, in relation to the land itself and the circumstances appertaining to it, it may be necessary to consider such matters as topography, location, size, shape, slope, view, land use (actual and potential), scope for, and difficulties of, development, uses and amenities; … there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. … some adjustment is always necessary; too much adjustment will render it unsafe to use a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method. … the assessment of the risks of adjustment is peculiarly within his (the expert valuer’s) sphere of skill.”

The use of comparable vacant sales has also been favoured by courts at all levels, when seeking to define the unimproved value of land. That was held in NR and PG Tow v Valuer-General (supra), where the Land Appeal Court said at p. 381:
“The whole of the valuation process must be based on this hypothesis. Courts of the highest authorities have laid down that the best test of value is to be found in the sales of comparable properties, preferably unimproved, on the open market round about the relevant date of valuation and between prudent and willing, but not over-anxious parties.”

That was also followed in WM and TJ Fischer v Valuer-General (1983) 9 QLCR 44 at 46; PH Clough v Valuer-General (1981-82) 8 QLCR 70 at 76; R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13, at 17; and also in Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327, at 330. On those precedents I find that Mr Wilson has followed a correct principle in his determination. The only matter therefore to be addressed is whether Mr Wilson has made an error in his comparisons with his sales.

Comparison of sales -

A matter for consideration is whether, as Dr Wang argues, the sales analysed by Mr Wilson reflected genuine transaction of market value for vacant land, where existing dwellings have had to be demolish to make way for a new dwelling. Dr Wang argues that where an existing dwelling has had to be removed, then the sale of that property reflected the market value of the land, plus some special value to the dispossessed owner of the old dwelling. This may be expressed as the price that the dispossessed owner would have been prepared to pay for the property taken rather than lose it.
That principle was followed by the Privy Council in Pastoral Finance Association Limited v The Minister (1914) AC 1083. However in that matter the court was considering the matter of compensation, where the land had been compulsorily acquired. In the current sales the new owners were under no compulsion to acquire the lands, and negotiated in an open market for them. On that basis they would have had to compete with other buyers who may have intended to reside in the old dwelling. That then raises the issue of the added value of the old dwelling.
The added value of such old dwellings would be measured by the additional value that those old dwellings would bring to the land, compared to what would be paid for the land had it been vacant. In seeking to ascertain the value of improvements, I note that s.5(1) of the Valuation of Land Act 1994 directs:
“5(1).

The ‘value of improvements’ means, in relation to land, the added value which the improvements give to the land at the time as at which the value is required to be ascertained for the purposes of this Act, irrespective of the cost of the improvements, including in such added value the value of any hotel license the value of which has been included in the improved value.

(2). However, the added value shall in no case exceed the amount that should reasonably be involved in affecting, at the time as at which the value is required to be ascertained for the purposes of this Act, improvements of a nature and efficiency equivalent to the existing improvements.”

The matter of the added value of improvements was also addressed in O’Brien Nominee Pty Ltd v. The Valuer-General (1979) 6 QLCR 280, where the Land Appeal Court said at p. 285:
“It is clear that the value which the improvements give to the land, subject to the above proviso, is to be ascertained irrespective of the cost, as at the relevant date, of making them.”

The Land Appeal Court in that matter had followed guidance in the decision of the High Court of Australia in The Australian Estates and Mortgage Co. Ltd v. The Commissioner of Land Tax (1931) 1 The Valuer, 1 July 1931, at p. 247, per Rix J. The Land Appeal Court went on further to note in O’Brien at p. 287:
“The test of ‘added value’ of improvements is, as the term implies the value added or given to the land by the actual and existing improvements.”

The common thread in all of those references is that it is the actual improvements which must be assessed, and not any other hypothetical, or potential improvements. However, those precedents remain silent in respect of the method to be adopted in ensuring that the improvements to the land are put in place.
Some guidance in respect of the method of assessing the added value may be found in the decision of the High Court of Australia in Morrison and Ors v The Federal Commissioner of Land Tax (1914) 17 CLR 498, where Griffiths CJ said at p.503:
“… the term ‘value of improvements’ is defined to mean ‘the added value which the improvements give to the land at the date of valuation irrespective of the cost of improvements.’ … Any operation of man on land which has the effect of enhancing its value comes within the definition of ‘improvement’.”

The added value principle was also addressed by the Land Appeal Court in Mayne Property Development Pty Ltd v. Chief Executive, Department of Natural Resources (1996-97) 16 QLCR 709, at p.722.

In the current mater clearly the existing dwellings on the selected sales provided by Mr Wilson in reality demonstrate a negative added value to the land. Mr Wilson’s evidence is that on average the purchasers would have had to incur an additional $4,000 to $6,000 to clear the sites for building purposes.
Had there been only one sale of such a nature, it could be argued that a “special” price had been paid as a consequence of having to later clear the site for a new dwelling. However Mr Wilson advises that it is increasingly common in Sunnybank for existing buildings to be demolished after sale, and the elements of free market transactions for such properties now exist. The existing five sales in this matter would support that conclusion.
In summarising the sales I find:

Sales	Area	Applied Value	Comparison
Sale 1	642 m²	$130,000	Inferior
Sale 2	451 m²	$104,000	Inferior
Sale 3	1,011 m²	$180,000	Superior/smaller
Sale 4	1,012 m²	$154,000	Inferior
Subject land	2,099 m²	$190,000	-

On those conclusions there is nothing to indicate that the respondent has made an error of fact. However Sale 3 reveals that while that sale is seen as superior to the subject land, because of its much larger size the subject land is seen to have a higher unimproved value.

In arriving at an appropriate valuation for the much larger subject land, I am reminded of the decision of the Land Appeal Court in Hans and Else Grahn v Valuer-General (supra) where it said at p. 330:
“As the Land Appeal Court said in its decision on the appellants’ previous appeal (H & E Grahn v The Valuer-General, AV89-246 and 247, 13 December 1990):

‘for the purpose of valuing residential sites, the preferable method of comparison is on a site to site basis and not on the basis of a unit area valued comparison. Site for site comparison should take into comparison such matters as the size of the lots, the situation of and access to the lots, the shape and topography of the lots etc and comparisons on a unit area basis do not necessarily reflect valuation considerations for the above features.’”

In each of the sales compared Mr Wilson has made no allowance for any likely costs of demolition of those properties. As such he has sought to provide a conservative estimate of the costs of obtaining a vacant building site in each case. I believe the key sale for comparison is really the adjoining sale at 55 Boorman Street, which was applied at $154,000. The test would then seem to reflect how much would the subject land, of area twice the size of 55 Boorman Street, reflect in the market place. The determined value of $190,000 for the subject land would appear to provide a fair allowance for its extra size.

Relativity -

In seeking to balance relativity between the two adjoining parcels at 55 Boorman Street ($154,000) and 50 Turton Street ($140,000), I note that those lots are about equal in area, but have different dimensions. Mr Wilson argues that 55 Boorman Street is much wider than 50 Turton Street, which is also impacted to a greater extent by the bus stop outside its frontage, and the heavier traffic flows in Turton Street. On balance I believe those comparisons appear reasonable.

Summary -

In summarising this matter I find that there is no inconsistency in Mr Wilson’s approach. I am further reminded that unless the appellant has proved that a wrong principle has been followed, or a serious error of fact has occurred, then the appeal must fail. (Brisbane City Council v. Valuer-General (1977-78) 140 CLR 41, at 56 per Gibbs J). I also note that under s.45(4) of the Valuation of Land Act 1944, the onus is upon the appellant to prove his case. That has not been demonstrated.
Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value of Lots 14 and 15 on RP 4920 as determined by the Chief Executive in the sum of $190,000 is affirmed.

NG DIVETT
MEMBER OF THE LAND COURT