Wills v Chief Executive, Department of Lands
[1996] QLC 53
•26 April 1996
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BRISBANE
26 APRIL 1996
In the matter of appeal against a valuation
Valuation Roll No.: 17342
Local Authority: Gold Coast
Gary Wills
v.
Chief Executive, Department of Lands
D E C I S I O N
In this matter the Chief Executive has, for the purposes of the Valuation of Land Act 1944, placed a value of $202,500 on the subject land as at the 1st January 1995. The appellant on the other hand contends for a figure of $170,000.
Evidence in the matter was given by the appellant Gary Wills on his own behalf and by Ian Leonard Hawley a valuer employed by the Chief Executive, Department of Natural Resources (formerly the Department of Lands) who gave evidence in support of the Chief Executive's figure.
Mr Hawley describes the subject land as being situated at 28 Armrick Avenue, Broadbeach about 300 metres west of the Broadbeach Surf Lifesaving Club and the Pacific Ocean and about 800 metres north of the Broadbeach central business district. Surrounding development comprises a mixture of multi unit properties and single unit residences. Armrick Avenue is a full width bitumen sealed roadway with concrete kerbing and channelling. The Gold Coast Highway is located about 100 metres to the west of the subject. Access to the property is good. The usual services are available to the subject land. The subject is rectangular in shape with an area of 569 m2, having medium elevation and good drainage and being level in topography. The land was zoned "residential/multi-unit" in the Town Planning Scheme of Gold Coast City Council effective at the date of valuation, however is used exclusively for a "single dwelling house" and has been valued as such by Mr Hawley pursuant to the provisions of Section 17 of the Valuation of Land Act.
Mr Wills used two approaches in support of his appeal. The first of these to which I will refer is based at the outset on a letter from a real estate agency dated 26th August 1994 to Mr Wills in which it is suggested that, were the subject land available for sale as an individual parcel a price of approximately $250,000 might be achieved, whereas a price of $310,000 would be available from a "developer" should the subject be made available together with 26 Armrick Avenue. Mr Wills carried out an exercise which commenced with the figure of $250,000 from which he deducted his estimate of the discounted value of the improvements, resulting in a figure of $173,000 for the land which he rounded down to $170,000.
This first approach is one that is of no assistance to me as the figure of $250,000 does not constitute a suitable basis for valuation. The figure put forward is an unsubstantiated estimate of a person who was not presented for cross-examination and as such cannot be a suitable foundation for an analysis of the type carried out by Mr Wills.
Mr Wills second approach was based on relativities, that is, it was based on a number of other properties whose values had been determined by the Chief Executive at the same relevant date as applied to the subject. A number of these relativity properties had been developed and was used for multi-unit residential purposes and as such did not provide a suitable basis for valuation purposes. The subject land has been valued by the Chief Executive's valuer, and properly so in my view, as a single dwelling house, as is required by Section 17(1) of the Valuation of Land Act 1944:
"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 a basic tenet of valuation practice and law that comparisons between subject properties and basis needs to be firstly on the basis comparing "like with like", a principle which is departed from rarely, if at all.
Mr Wills did include one relativity property which had an unregistered duplex constructed on it, but which was apparently valued by the Chief Exectutive as a single residence. In reference to this property, as well as to the other multi-unit properties referred to above, Mr Wills attempted to demonstrate that an allowance ought to be made for the size difference between his parcel of land and the bases using a mathematical approach. That is, when values struck by the Chief Executive were less in the cases of smaller blocks by a calculated percentage, he reasoned that for a similar size differential when referring to his own land that a similar percentage reduction in value should apply. There are two difficulties with this approach apart from the use of inappropriate bases that I have mentioned above. The first of these, and perhaps the most important, is to note that Mr Hawley for the Chief Executive valued the subject land on a site basis, that is, as a parcel not on a value per square metre, and in the case of a piece of land being valued for single residential purposes, I would agree that this is the appropriate method to employ. Accordingly any variation in size would be taken into account if at all, by making such allowance as would be made in the market place rather than by carrying out a mathematical calculation as if valuations were struck on a value per square metre basis.
Mr Hawley's approach is supported by the case of H & E Grahn v The Valuer General (AV89-246 and 247) 13 December 1990 unreported, where it was said:
"For the purposes 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 value comparison. Site for site comparison should take into consideration such matters as the size of the lot, 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 of the above features."
The second difficulty I have with his approach is that the size of a parcel of land is simply one of the factors that is taken into account by a valuer in making an assessment. In the approach described by Mr Wills he has proceeded as if size was the single determinant of value differentiation between different blocks of land. As Mr Hawley said in his evidence, size, proximity to the Gold Coast Highway, proximity to the beach and topography were the significant factors which featured in his comparison exercise.
Mr Wills referred to a "discount" which he suggested should apply to the subject land because of its residential usage. In so doing he compared a relativity property valued for multi-unit residential purposes with a single unit residential valuation and suggested that the percentage "discount" so revealed should apply in the case of the subject land. It can be seen that Section 17(1) set out above is not a provision which authorises such an approach. The provision is an instruction from Parliament that lands used exclusively for residential purposes are subject to an exception to the general rule that land is to be valued for its highest and best use. The provision has frequently been described as a "protective provision".
In his valuation Mr Hawley referred to a property diagonally opposite the subject which had been valued by the Chief Executive at $202,500. This basic property is marginally larger than the subject, having an area of 607 m2, is located a little further from the beach, and is somewhat closer to the Gold Coast Highway. He referred also to three applied values in St Kilda Avenue two having values of $202,500 each, and one with better topography than the other two, having an applied value of $205,000. Access from these basic properties to the beach is slightly inferior to the subject whether access is gained along the available footpaths or through a park area. Under cross-examination Mr Hawley said that the subject land suffered a little in that a multi-unit building is situated on the block to the west and as the sun descends in the afternoon the subject property becomes increasingly shaded. This disadvantage is more noticeable in winter.
Mr Wills has taken on a considerable task in attempting to present a valuation which supports the figure that he contends for in this appeal and which shows the value of the Chief Executive to be wrong. His detailed and logical approach has a superficial soundness to it, however it neither accords with valuation principle nor encompasses the range of considerations which an experienced and qualified valuer would bring to bear in such a case.
Section 33 of the Valuation of Land Act 1944 provides:
"Any and every valuation, or alteration of the valuation of any land made, or purporting to be made, under this Act by the Chief Executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered."
Mr Wills has not convinced me that the Chief Executive through Mr Hawley has approached his valuation on a wrong principle, has made a material error of fact, or has not applied the skills of a valuer in a professional manner. Accordingly the appeal is dismissed and the valuation of the Chief Executive is affirmed.
RP SCOTT
MEMBER OF THE LAND COURT
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