Beydoun v Valuer-General [2018] QLAC 1 [2018] 39 QLCR 34

LAND APPEAL COURT OF QUEENSLAND CITATION: Beydoun v Valuer-General [2018] QLAC 1 PARTIES: Nabil Beydoun (appellant) v Valuer-General (respondent) FILE NO: LAC005-17 DIVISION: Land Appeal Court of Queensland PROCEEDING: Appeal ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 15 March 2018 DELIVERED AT: Cairns HEARING DATE: 2 February 2018, at Cairns THE COURT Henry J W A Isdale, Member of the Land Court P G Stilgoe, Member of the Land Court ORDERS: 1. Leave granted for the Appellant to adduce further evidence. 2. Appeal dismissed. 3. The valuation appealed against is confirmed. That valuation is of Lot 9 on RP701130 which has an area of 1012m2. The valuation is $305,000 and the date of valuation is 1 October 2015. The street address is 227 McLeod Street, Cairns North, 4870. CATCHWORDS: REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – where the appellant contended that the valuation was excessive – where the appellant relied on relativity with the Valuer- General’s valuation of one adjourning parcel of land – where the Valuer-General relied on expert evidence based on sales of comparable land – where the Land Court dismissed the appellant’s appeal – where the Land Appeal Court also dismissed the appellant’s further appeal APPEAL AND NEW TRIAL – ADMISSION OF FURTHER EVIDENCE – where the appellant sought to introduce further evidence on the appeal – where the -- 1 of 10 -- 2 respondent did not object – where further evidence was introduced on appeal to the Land Appeal Court Land Court Act 2000 (Qld) Land Valuation Act 2010 (Qld) s 19, s 170, 172 Valuation of Land Act 1944 (Qld) Banks v Valuer-General [2017] QLC 52, cited Beydoun v Valuer-Geneal [2017] QLC 36, cited Bignell v Chief Executive, Department of Lands [1996] QLAC 22, followed Brisbane City Council v the Valuer-General (1978) 140 CLR 41, cited Fairfax v Department of Natural Resources and Mines [2005] QLC 11, followed Finlayson v Valuer-General (2013) 34 QLCR 101, Hans and Else Grahn v Valuer-General (1992-1993) 14 QLCR 327, followed J.L. and I. Qualischefski v Valuer-General (1979) 6 QLCR 167, followed R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, cited Spencer v The Commonwealth (1907) 5 CLR 418, cited Thomson v Department of Natural Resources and Mines [2007] QLC 92, cited Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137, followed WM and TJ Fischer v The Valuer-General (1983) 9 QLCR 44), cited APPEARANCES: The appellant represented himself. G P Sammon, Crown Solicitor, for the respondent. [1] HENRY J: I agree with the reasons of Member Isdale and with the orders proposed. [2] MEMBER ISDALE: Background The respondent carried out a routine valuation on land owned by the appellant, a 1,012m2 parcel at 227 McLeod Street, Cairns. This is required to be done under the Land Valuation Act 2010 (Qld). The date of the valuation was 1 October 2015 and the site value, a term found in the Act and not the subject of any dispute, was assessed as $305,000. [3] The respondent, having unsuccessfully objected to that value, appealed to the Land Court, contending that the valuation ought to have been no more than $230,000, the site value assessed by the respondent as at 1 October 2014. -- 2 of 10 -- 3 [4] The appeal to the Land Court was heard at Cairns on 29 June 2017 and the Court’s decision was given on 14 July 2017. The learned President dismissed the appeal and confirmed the respondent’s valuation.1 The Appeal to this Court [5] The appellant appealed to this Court on 22 August 2017 and his appeal was heard on 2 February 2018, the appellant’s appeal record book having been filed on 18 January 2018. Prior to filing the appeal record book, the appellant filed, on 16 January 2018, a General Application seeking to adduce further evidence on the appeal. The appellant’s General Application [6] The General Application was heard at the commencement of the hearing of the appeal. The respondent had opposed the application and sought an order for costs in respect of it. Counsel for the respondent cooperatively arrived at an agreement with the appellant at the bar table. The result was that the evidence sought to be admitted was limited to a number of photographs which were admitted by consent. This has made it unnecessary to further consider the General Application. The grounds of appeal [7] The appellant relied on five grounds of appeal, which may be addressed individually. Ground of appeal “A” [8] The Land Court: a. Failed to rely primarily in determining the value of the appellant’s relevant land on the values or valuation of the adjoining block of land at 229 McLeod Street, Cairns to the appellant’s land. [9] This ground of appeal suffers from the difficulty that the valuation of the adjoining land is simply another valuation performed by the respondent. It would only be of use to the appellant if it was shown to be correct and the land properly comparable to the subject land. The appeal ground is based on relativity; how the appellant’s land compares to its neighbour’s value, both figures arrived at by the respondent. This is not the question that was before the Land Court which, under section 170(b) of the Land Valuation Act 2010, may amend the valuation so that it is “correctly” made.2 1 Beydoun v Valuer-General [2017] QLC 36. 2 Land Valuation Act 2010 (Qld) s 170 (b). -- 3 of 10 -- 4 [10] As this Court said in Bignell v Chief Executive, Department of Lands: What has to be decided in this case is the proper value of the subject land by reference to sales evidence about comparable unimproved properties. … If a proper valuation of the subject land makes it inconsistent with the relative value of neighbouring blocks then so be it. The question before this Court is ‘the correct valuation of the subject land, not the correct valuation of the area’.3 [11] The Land Court has said, in relation to the use of relativities with other valuations as a means of valuing land: A valuation deducted from relativities with other valuations made by the Valuer-General and that were not themselves tested in the present proceedings by reference to sales evidence cannot safely be relied upon. Where, as in the present case, the subject valuation is said to be incorrect, it would not be safe to rely on other valuations and to assume that they are correct so as to draw a conclusion about the valuation of the subject land.4 [12] In Hans and Else Grahn v Valuer-General,5 this Court considered the then applicable Valuation of Land Act 1944. The Court’s comments are equally applicable to the current Act. The Court said: The decision of the High Court of Australia in Brisbane City Council v the Valuer-General ((1978) 140 CLR 41, 5 QLCR 283) and the decisions of the Land Appeal Court in cases such as WM and TJ Fischer v The Valuer- General ((1983) 9 QLCR 44) and R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13) are authority for the following propositions: (a) It is desirable that valuations made for the purposes of the Valuation of Land Act 1944 of comparable lands should bear proper relativity, one to the other, so long as the valuations are soundly based. It is, however untenable to adopt a value for one parcel on relativity with another which has no sound basis. (R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, at p. 16 and cases cited in it).6 [13] The Land Appeal Court has consistently recognised that relativity of valuations is desirable. It has also recognised that the relativity of valuations to each other does not establish that a valuation pointed to for the purpose of showing correct relativity is itself an accurate valuation. [14] As the authorities which have been referred to show, it would be incorrect to rely primarily on the valuation of the land adjoining the subject land for the purpose of 3 [1996] QLAC 22. Applied in Thomson v Department of Natural Resources and Mines [2007] QLC 92. 4 Finlayson v Valuer-General (2013) 34 QLCR 101, [1] – [6] (citations omitted). See also Banks v Valuer-General [2017] QLC 52, [49]. 5 (1992-1993) 14 QLCR 327. 6 Ibid, 328 – 329. -- 4 of 10 -- 5 valuing it. There is a method of finding the site value of the subject land that has been found to be reliable and which will be discussed presently. [15] For the reasons which have been given, ground of appeal “A” must fail. Ground of appeal “B” [16] The Land Court: b. Relied primarily on valuations elsewhere in the neighbourhood of sold real estate. [17] The respondent relied in the Land Court on the evidence of a registered valuer, Ms Hunter. As the learned President noted, Ms Hunter analysed three sales chosen as the most comparable considering their size, location and zoning.7 The appellant did not propose any other sales for consideration.8 [18] This Court said in Grahn v Valuer-General: … (b) The basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land (WM and TJ Fisher v The Valuer-General (1983) 9 QLCR 44, at p. 46; R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, at p. 17). … (e) Whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principal of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence (WM and TJ Fisher v The Valuer-General (1983) 9 QLCR 44 at p. 46). (f) If possible, the Valuer-General should obtain uniformity between different blocks in the same land category or type, but should do so (preferably by reference to sales of comparable land) by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error (R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, at pp. 16-17 and cases cited in it).9 [19] The superiority of sales evidence when valuing land is illustrated by the words of then President Trickett in the Land Court in Fairfax v Department of Natural Resources and Mines: The principles for determining of the “market value” of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the 7 Beydoun v Valuer-General [2017] QLC 36, [12] - [17]. 8 Ibid, [17]. 9 (1992-1993) 14 QLCR 327, 328 – 329. -- 5 of 10 -- 6 circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 411). It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that: “Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but - as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales.”10 [20] For the reasons that have been given, ground of appeal “B” is not a proper basis upon which to criticise the decision of the learned President which was made in accordance with the correct approach in the use of evidence of sales. Ground of appeal “C” [21] The Land Court: c. Placed too much weight on arbitrary assessment of the value of land divorced from improvements (like a house) of property sold in the neighbourhood. [22] The correctness of the use of sales evidence has already been discussed. The Court relied on the evidence of the sole expert witness, a registered valuer with approximately 30 years’ experience in the Cairns area.11 The valuer’s report became exhibit 3 before the Land Court. The appellant cross-examined the valuer.12 [23] It would be incorrect to attempt to categorise the valuer’s expert opinion as arbitrary, it is an expert’s report of her opinion. The appellant had, and took the opportunity to cross-examine the valuer on the report. [24] It is not a valid criticism that too much weight was placed on an assessment of the value of land divorced from improvements, such as a house. The Land Valuation Act 2010 (Qld) requires that the site value of land be assessed on the basis that all non- site improvements had not been made.13 It is unnecessary for present purposes to 10 [2005] QLC 11, [11] to [12]. 11 Transcript page 1-23, lines 16 – 31. 12 Transcript page 1-29 ff. 13 Land Valuation Act 2010 (Qld) s 19(1). -- 6 of 10 -- 7 examine what are non-site improvements, as that question did not arise in this appeal. It is enough to say that improvements such as a house will be disregarded as it is the land which must be valued. [25] It is accordingly not a valid criticism of the learned President’s decision that weight was placed on the value of land divorced from improvements upon it, such as a house. That is the correct approach. Ground of appeal “C” is not made out. Ground of appeal “D” [26] The Land Court: (d) Did not give sufficient weight (sic) the Respondents their own current assessment of the value of land adjoining the Appellants land at 229 McLeod Street, Cains. [27] The appellant is not a qualified valuer of land.14 The only expert evidence was that given on behalf of the respondent. The expert qualified valuer provided an opinion which was persuasive to the learned President. That opinion was not contradicted by any competing expert evidence. The appellant’s opinion was to the effect that the site value should not be more than $230,000, the site value assessed by the respondent as at 1 October 2014. The appellant did not have a valuation assessment arrived at by a method which the Courts have decided would be reliable. [28] It is unnecessary to decide whether the appellant’s opinion was admissible in proof of value because, even if it was, in view of the expert evidence of the respondent’s valuer, the appellant’s opinion however genuinely held, could not be persuasive. The Court notes the appellant’s disagreement with the valuer’s opinion, as demonstrated in his cross-examination of the valuer, who did not depart from the valuation opinion expressed in the written report that became an exhibit. [29] This Court is not an investigating body and must rely on the evidence put before it by the parties. In J.L. and I. Qualischefski v Valuer-General, the Land Appeal Court said: Neither this Court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-Genaral to substantiate his case. This role is in contradistinction to jurisdiction conferred under the Land Act. In appeals of the nature of the subject, the onus which the appellant must assume is not an easy one to discharge without the assistance of a registered valuer who can lead evidence as to sales analyses and/or comparison with 14 Transcript page 1-11, lines 9 – 11. -- 7 of 10 -- 8 valuations made by the Valuer-General in respect of comparable properties.15 [30] This Court has also recognised the reliability of valuations based on sales. As was said by this Court in N.R and P.G Tow v Valuer-General: Courts of the highest authority have laid down that the 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.16 [31] The series of ten colour photographs which became exhibit 1 in the appeal show the subject land and its surroundings. They illustrate drainage aspects in wet conditions and the shape and contour of the land. The learned President discussed these aspects in the decision of the Land Court.17 The photographs illustrate the qualities of the land but do not contradict the Court’s comments. [32] An examination of the evidence shows that the learned President did not fail to give sufficient weight to the respondent’s opinion of the value of the land at 229 McLeod Street. As has been discussed, since the appellant’s opinion was not that held by a suitably qualified expert and was not based on a value disclosed by a sale, it was inevitable that it was accorded less weight than the expert’s opinion based on a comparison made using sales evidence. [33] For these reasons ground “D” must also fail. Ground of appeal “E” [34] The Land Court: e. Did not give sufficient weight to the distinctive defects of the Appellant’s land compared to the adjoining land at 229 McLeod Street, Cairns namely i. Narrow frontage; ii. Lower level of the relevant land particularly at the rear and sides; iii. Failed to appreciate that 3 adjoining neighbours have raised the level of their land by 10 to 15 cm each after the existing house on the Appellant’s land was built consequently rain water accumulated on the Appellant’s land and nothing can be done to remedy this existing problem and existing house slab on this land is only 12cm above ground level and to raise the level of the land to at least the level of the adjoining land will be very expensive; and iv. That because of the narrow frontage of this land namely 12 meters there is very limited prospects of ever demolishing the existing building and then constructing any new building other than in the same style of existing building. This restricts its use to a narrow building with a narrow access unlike the use and building opportunities available with a normal 15 (1979) 6 QLCR 167, 172. 16 (1978) 5 QLCR 378, 381. 17 Beydoun v Valuer-General [2017] QLC 36, [18]-[22]. -- 8 of 10 -- 9 sized frontage on both blocks of land adjoining this land of 36 meters each. This reduces the value that any future Buyer may want to pay for this new block. Its value should not be assessed purely on its area without taking into account its unique defective features. Regarding (i) and (ii) [35] The learned President asked the appellant about the aspects of the land relating to its frontage and drainage.18 The decision of the Land Court considers the aspects of frontage and drainage, along with the appellant’s statement that substantial costs would need to be incurred in order to rectify the drainage problem.19 The Land Court has not been shown to be in error in this regard. Regarding (iii) [36] The appellant made it clear in his evidence in the Land Court that the drainage difficulty is one about which “nothing can be done” in the context of the present development.20 The Land Court accepted the respondent’s valuer’s opinion that if the land was vacant, the drainage issues could be dealt with by minor earth works.21 [37] The Land Court did not fail to appreciate these aspects of the case. The Court accepted the evidence of the valuer in regard to them when they were not contradicted by any expert evidence. This is a decision which it was open to the Land Court to make and has not been shown to be in error. Regarding (iv) [38] The Land Court considered these aspects,22 noting that the Valuer accepted that the narrow frontage was a disadvantage.23 The assertion that the value should not be assessed purely on its area without taking into account its unique defective features is not of assistance to the appellant. The unique defects to which the appellant refers are clearly dealt with in the reasons of the Land Court and have already been discussed. [39] Appeal ground “E” (iv) has not been made out. 18 Transcript page 1-5, from line 11 to page 1-6, line 13. 19 Beydoun v Valuer-General [2017] QLC 36, [18]. 20 Transcript page 1-6, line 13. 21 Beydoun v Valuer-General [2017] QLC 36, [21]. 22 Ibid [18], [20]. 23 Ibid [20]. -- 9 of 10 -- 10 Conclusion [40] As none of the grounds of appeal has been made out, the appeal must be dismissed. [41] Section 172 of the Land Valuation Act 2010 (Qld) provides that this appeal is by way of a rehearing and that s 170 of the Act applies. That section provides for the orders that Court may make. [42] In accordance with ss 170 and 172 it is appropriate that the Court orders that the appeal be dismissed and that the valuation appealed against be confirmed. Disposition [43] I would make the following orders: 1. Leave granted for the Appellant to adduce further evidence. 2. Appeal dismissed. 3. The valuation appealed against is confirmed. That valuation is of Lot 9 on RP701130 which has an area of 1012m2. The valuation is $305,000 and the date of valuation is 1 October 2015. The street address is 227 McLeod Street, Cairns North, 4870. MEMBER STILGOE: I agree with the reasons of Member Isdale and with the orders proposed. HENRY J MEMBER ISDALE MEMBER STILGOE -- 10 of 10 --