Dr Yvonne Collen Pty Ltd v Valuer-General [2015] QLC 41 (2015) 36 QLCR 292

LAND COURT OF QUEENSLAND CITATION: Dr Yvonne Collen Pty Ltd v Valuer-General [2015] QLC 41 PARTIES: Dr Yvonne Collen Pty Ltd (appellant) v Valuer-General (respondent) FILE NO: LVA495-13 DIVISION: General Division PROCEEDING: An appeal against valuation under the Land Valuation Act 2010 DELIVERED ON: 24 November 2015 DELIVERED AT: Brisbane HEARD ON: 25 March 2014 HEARD AT: Brisbane MEMBER: WL Cochrane ORDER: Appeal dismissed. CATCHWORDS: Valuation – appeal against annual valuation – relevant sales - Land Valuation Act 2010 – statutory valuation – unimproved value – rural residential land – comparable sales – Valuation methodology – sales of improved land versus sales of unimproved land BT Dillon v Valuer-General (1986-87) 11 QLCR 231 BWP Management Limited v Valuer-General [2014] QLC 3 Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327 Lawson v Valuer-General [2012] QLC 27 Rodney v Valuer-General [2014] QLC 26 Steers v Valuer-General [2012] QLC 12 NR and PG Tow v Valuer-General (1978) 5 QLCR 378 APPEARANCES: Mr T Scott, (agent) for the appellant Mr P Prasad, (legal officer) for the respondent Background -- 1 of 20 -- 2 [1] This is the decision in an appeal in respect of land located at 238 River Road, Beaudesert in South East Queensland which land is otherwise described as Lot 10 on RP 204980, Parish of Beaudesert. [2] The land has an area of 8.006 hectares (ha) and was valued on 1 October 2012 pursuant to s 72 of the Land Valuation Act 2010 at $380,000 (effective from 30 June 2013). [3] The original decision valuing the land at $380,000 was objected to by the appellant but on 24 July 2013 the respondent sent notification that the objection had been decided and the valuation remained unaltered. [4] In the letter of 24 July 2013 rejecting the objection the delegate identified the following reason for its decision as: “When compared to sale prices of similar properties, the delegate decided the figures supported the applied value and no change in the valuation should be made.” [5] From that decision the appellant now appeals to this Court contending that the appropriate valuation of the land should be $280,000. Grounds of Appeal [6] Within the notice of appeal filed on 19 September 2013 the following grounds of appeal are identified: “1. The objection decision does not make reference to whether the frequency and extent of flooding on the property was considered. During major flooding events some 1.5 Ha of land (18% of the property) is submerged by floodwaters and is unuseable thereby reducing the value of the property. There have been three major floods since 2008 where the floodwaters have risen to the 50 metre AHD levels. There is no indication that the flooding issue was considered in making the decision. 2. The objection included supporting sales information of 2 adjacent properties that showed significant sale price reductions in the order of 30% decrease that should be applied to property valuations. While these sales were early in 2013 they were considered as part of the objection, however the decision considers these sales figures support the existing applied value to my property and no change in the valuation should be made. While the objection clearly showed sales evidence that supports a reduced property valuation that evidence appear [sic] to have been ignored.” Legislative Provisions [7] This appeal is brought pursuant to the provisions of the Land Valuation Act 2010 (LVA). [8] The LVA made a number of significant changes to the valuation process which had previously been carried out pursuant to the provisions of the Valuation of Land Act 1944 (VLA). -- 2 of 20 -- 3 [9] The LVA retains an obligation upon the Valuer-General to carry out a valuation of all properties throughout Queensland for the purpose of rating, land tax and other associated purposes. [10] The respondent is required to comply in its conduct with the requirements of the Land Valuation Act when undertaking various valuations required. [11] The LVA has brought about a change to the valuation approach insofar as under the previous Act, the Valuation of Land Act, all valuations were of unimproved value but now under the LVA valuations are broken into two categories: non-rural land which embraces residential, commercial and industrial land on the one hand and rural land on the other. [12] Pursuant to the provisions of the LVA, the value of land to be valued by the respondent is, in the case of non-rural land, its site value which term is defined in the Act and for rural land, its unimproved value.1 [13] The Land Valuation Act also draws a distinction between the unimproved value of improved land (Chapter 2, Part 2, Subdivision 4) and the value of unimproved land (Chapter 2, Part 2, Subdivision 5). [14] Section 26 of the LVA provides a meaning for the “unimproved value of improved land” in the following terms: “26 What is the unimproved value of improved land (1) If land is improved, its unimproved value is its expected realisation under a bona fide sale assuming all site improvements and non-site improvements on the land had not been made. (2) However, the land’s unimproved value is affected by any other relevant provisions of this chapter.” [15] Similarly, s 29 provides a meaning for the value of unimproved value in the following terms: “29 What is the site value and unimproved value of unimproved land If land is unimproved, both its site value and its unimproved value are its expected realisation under a bona fide sale.” [16] The Dictionary in Schedule 2 to the LVA defines “unimproved” as: “means land in its natural state.” [17] In the present case the valuation exercise which must necessarily be conducted is one which calls for the determination of the unimproved value of improved land, that is assuming that all site and non-site improvements do not exist. 1 See the discussion of the valuation process by His Honour Mr Smith in Lawson v Valuer-General [2012] QLC 0027 [10]-[15]. -- 3 of 20 -- 4 [18] In the Lawson decision, footnoted above, His Honour Mr Smith referred2 to a decision of His Honour Mr Isdale in Steers v Valuer-General3 where His Honour was obliged to consider the valuation of land pursuant to the LVA. [19] His Honour Mr Isdale said: “[8] The use of sales to provide comparisons of value is well established. In NR and PG Tow v Valuer-General (1978) 5 QLCR 378, the Land Appeal Court constituted by Stable SPJ, Mr Smith and Mr Carter said at page 381: ‘Courts of the highest authority 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.’ [9] This Court is required to follow the decisions of the Land Appeal Court and accordingly must prefer the evidence of comparable sales to the method contended for by the appellant, simply increasing a previous value by a factor of 10. Mr Steers did not explain why this particular multiplier and not some other one should be applied.” [20] His Honour Mr Smith in Lawson then said:4 “[14] I consider it remains a relevant feature under the LVA, to consider market value. As then President Trickett said in Fairfax v. Department of Natural Resources and Mines: [11] The principles for determination 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 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 a property. (See Griffith CJ at 432 and Isaacs J at 441). [12] 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.” ’ [15] Despite the legislative change, it is refreshing that the views expressed by the High Court in Spencer, now well over a century ago, remain just as current and relevant today as they did when they were first uttered. It is certainly my 2 Ibid [13]. 3 [2012] QLC 12 [8]-[9]. 4 Lawson v Valuer-General [2012] QLC 27 [14]-[15] (citations omitted). -- 4 of 20 -- 5 view, at least at this stage until other authorities may prove me wrong, to continue to apply the Spencer test under the LVA.” [21] In addition to the changes with respect to the valuation process, the regime established by the Land Valuation Act also brings a change in the evidentiary onus. [22] Under s 3 of the Valuation of Land Act the valuation made by the Valuer-General was deemed to be correct unless proved otherwise either upon objection or appeal. That is to say there was a presumption of correctness in favour of the valuation contended for by the Valuer-General. [23] The Land Valuation Act does not retain that evidentiary provision but rather provides at s 169(3): “However, the appellant has the onus of proof for each of the grounds of appeal.” [24] The only grounds of appeal which are able to be contemplated at a hearing are those grounds stated in the valuation appeal notice.5 [25] Accordingly, the appellant is limited to those matters which are recited in the notice of appeal. Those matters are set out above. The Witnesses [26] The appellant engaged a valuer to prepare a report prior to the appeal being filed. [27] That report was prepared by Mr John Muchall, a certified practicing valuer in the employ of LandMark White. [28] Mr Muchall’s report became an exhibit before the Court6 and I shall refer to its genesis later in this decision. [29] The company Dr Yvonne Collen Pty Ltd is apparently, it would seem, the alter ego of a Doctor Yvonne Collen. The company was represented at the appeal by Dr Collen’s husband, Mr Scott. Mr Scott is not a registered valuer nor is he a qualified lawyer but he does have employment within the property development industry. [30] I have commented in other cases on the difficulties confronted by self-represented parties to an appeal against a valuation of the Valuer-General in circumstances where they lack legal qualifications or experience in forensic cross-examination of expert witnesses.7 [31] It ought not be thought however that a self-represented party’s prospects are entirely forlorn. There are instances where self-represented parties enjoy considerable success before this Court but it must be noted that the task they set themselves is a 5 Land Valuation Act s 169(1). 6 Exhibit 3. 7 See my observations in Rodney v Valuer-General [2014] QLC 26 [54]. -- 5 of 20 -- 6 difficult one when they are confronted by the dual difficulties of considered expert evidence and the forensic skill of the advocates representing the Valuer-General. [32] The evidence of the respondent Valuer-General was given through a report of Candice Lauren Belle Ashley, a valuer in the employ of the Valuer-General’s department. Ms Ashley prepared a written report which became an exhibit before the Court.8 [33] Ms Ashley and Mr Muchall participated in a conclave in an attempt to identify areas on which they could agree the areas of disagreement and the reasons for those disagreements. [34] Consequent upon that conclave they prepared and provided to the Court a joint statement of issues9 which also became an exhibit. The Land [35] The valuers in their joint report provide, as an agreed set of matters, an adequate and complete description of the land. They describe it as follows:10 “Description  Subject parcel described as Lot 10 on RP204980 in the Parish of Beaudesert and having a total area of 8.006 hectares, and located at 238 River Road, Beaudesert.  The property is designated ‘Rural’ with the ‘Equestrian Activities’ precinct under the former Beaudesert Shire Council’s Planning Scheme 2007.  The property is used as a rural home site with the potential for small scale farming or equestrian activities.  The use of the property complies with the intent of the Council’s planning scheme. Location and access:  The property is situated at 238 River Road, Beaudesert. By road the subject is located approximately 6km south west of the township of Beaudesert. River Road is a dual width, gravel strip road at the property frontage of about 400 metres. River Road connects to Kargorum Road, a dual lane bitumen strip providing easy access to Beaudesert.  Access to the property is considered easy and direct. Some seasonal flooding occurs along River Road during abnormally high flood events.  The property is situated in established ‘Equestrian Activities’ precinct where surrounding properties are used mostly for horse breeding, spelling and training as well as mixed farming activities. Nature of land  The property consists of cleared land comprising blue gum flats on alluvial soils fronting the Logan River. It is a slightly irregular shape with rural views in a cul 8 Exhibit 4. 9 Exhibit 5. 10 Exhibit 5, pages 2  3. -- 6 of 20 -- 7 de sac location. The property provides a rural home site with mostly usable land.  About 1.5ha (19%) of land along the Logan River frontage is contained within the ‘Development Constraints Overlay – Flood and Landslide Hazard’ of the Beaudesert Planning Scheme. The land is located under the 50m AHD contour and experiences flooding while the balance of the land (6.5ha) is above this contour and remains flood free. Stock water is available from a 27 m deep stock bore.” The Appellant’s Evidence [36] The appellant called Mr Muchall to speak to the report which had been prepared by him. [37] In his report Mr Muchall comes to the conclusion that: “The subject property should have an assessed unimproved land value of $320,000 as at 1 October 2012.”11 [38] In the course of opening of the appeal Mr Scott abandoned the contention that the land should be valued at $280,000 and said: “Well, your Honour, I have engaged an expert witness and I will go with his valuation being $320,000.”12 [39] That was a somewhat surprising concession given that the valuation was dated 21 January 2014 and the notice of appeal was filed on 19 September 2013. [40] It is appropriate to make some observations about Mr Muchall’s evidence generally. Under cross-examination he conceded that the report13 was not a report that had been created for the purpose of the Land Court hearing. [41] He told the Court, with respect to the genesis of the report that: “It was prepared for my client to ascertain what I considered would be its unimproved value as at October 2012.”14 [42] At the time he prepared report there had been no appeal to this Court and when asked: “This report that’s relied on here today is not one that was prepared for the purpose of becoming a court report?” He confirmed: “That is correct.”15 [43] Mr Muchall confirmed that the report prepared by him was not meant to be responsive to the issues identified in the notice of appeal.16 Indeed it makes no 11 Exhibit 3, page 4. 12 T (Transcript) 1-5 L (Line) 18  19. 13 Exhibit 3. 14 T 1-13 L 26  27. 15 T1-13 L 45 – 46. 16 T 1-14 L 1  2. -- 7 of 20 -- 8 reference at all to the first ground of appeal which raised the issue of whether consideration of flood proneness played any part in the original valuation exercise. [44] That is readily apparent when a comparison is made between the articulated grounds of appeal and the report prepared by Mr Muchall. [45] I asked Mr Muchall:17 “So is it the case, then, Mr Muchall, that you have not, in fact, prepared a report in a form that you would have prepared, had you been asked to have regard to the grounds of appeal and the fact this is going to be a court hearing?” Mr Muchall replied: “That is correct, Your Honour.”18 [46] Mr Muchall agreed with the proposition put to him by Mr Prasad for the respondent that: “The methodology to be applied in determining the unimproved value is for a direct comparison of sales evidence.”19 And that he: “Would also agree that in order to assess an unimproved value of a subject property, it is beneficial to compare it with like for like or other unimproved sales.”20 [47] Mr Muchall for his part identified six sales which he said were relevant to the valuation exercise.21 [48] In the light of that he was then asked in cross-examination to concede that all of the sales he relied upon  except for Sale 5  were improved sales.22 [49] Two he said were heavily improved with equestrian-related structures, buildings and the like. Two he said were improved to a lesser extent and Sale 4 at Thiedke Road was one where the improvements were not as significant as the first three which were, in the main, equestrian facilities. Sale 6 had a house constructed on it.23 [50] By way of contrast, Mr Muchall agreed that the sales evidence relied upon by Ms Ashley, the valuer called by the respondent, related to land sales which were either vacant or only lightly improved properties.24 [51] Mr Prasad for the respondent was keen to explore with Mr Muchall the nature of the sales upon which he relied. In addition to them being either heavily or somewhat 17 T 1 14 L 40  44. 18 T 1  14 L 44. 19 T 1 15 L 14  15. 20 T 1 14 L 18 – 20. 21 Exhibit 2, pages 2  4. 22 T 1  15 L 23  28. 23 T 1  15 L 28  34. 24 T 1  15 L 38  40. -- 8 of 20 -- 9 improved, some of Mr Muchall’s sales were what might be regarded as sales taking place under pressure and therefore, not necessarily satisfying the Spencer test for a not too keen vendor and a not too keen purchaser. Two of the sales were mortgagee in possession sales and one was a sale between two local owners. [52] Mr Muchall’s response to that implied criticism was to say that he regarded receiver or mortgagee sales as an indication of what a market might be doing at a particular point in time.25 [53] He pointed out that receivers in that situation have an obligation to make sure that the properties are well advertised and marketed so that there is proper market awareness of the availability of the property for sale but he conceded that sometimes purchasers tend to wait until they know that the vendor is “more serious” and generally that is when the sales occur.26 [54] In considering the sales relied upon by Mr Muchall it might be recalled that the date of valuation was as at 1 October 2012. Three of the sales relied upon by Mr Muchall occurred at that time, namely his Sales 4, 5 and 6. [55] The other three sales occurred in January and March of 2013 so occurred some three to five months after the relevant valuation date. [56] One of the difficulties which has to be confronted when using sales of improved properties to come to a view as to the unimproved value of those properties is that some analysis must necessarily occur to identify the unimproved value of the land which was sold in an improved state. [57] Rost and Collins in their well-known book described the process in the following terms:27 “The process is one of subtracting from the sale price the value attributed to the improvements, plus an allowance to cover loss of interest on capital whilst the land is being improved and brought into production. The sum which results represents the amount the land could be expected to realise in the market if the improvements had not been made (or did not exist). [58] In a West Australian decision the following was observed: “The correct principle is, in my view, that the valuer must reveal as far as possible the process of reasoning actually employed so as to enable the Court to evaluate the evidence and the expert’s conclusion.”28 25 T 1-16 L 44  46. 26 T 1-17 L 8  9. 27 R O Rost & H G Collins, Land Valuation and Compensation in Australia, (Publisher, 3rd ed, 1996) 304. 28 McLure J in Western Australia Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295, 72 (citation omitted). -- 9 of 20 -- 10 [59] The notion of a valuation report making clear any underlying assumptions and the methodology adopted by the valuer in coming to his or her view as to the appropriate value of a piece of land is often referred to as a “speaking valuation”. [60] Neither of the valuers in the present case provided what might be regarded as a “speaking” valuation in the sense in which the desirability of setting out their reasoning is explained above. [61] Yeldam J has remarked in a decision: “In my opinion it is not a ‘speaking’ valuation because no reasons are given in the document itself and no explanation is made of the basis on which the valuer has proceeded.”29 [62] The absence of proper explanation makes it difficult to assess the valuation itself. [63] Mr Muchall’s Sale 1 was a property located at 191 River Road Beaudesert and it was a mortgagee-in-possession sale. [64] Mr Muchall acknowledged that that particular property was a heavily improved sale with a selling price of $852,000 for a 29.37 ha property which he assessed as having an unimproved value of $400,000 to $450,000. Its value as at October 2012 was assessed by the Valuer-General as being $530,000. [65] In his comparison of that 191 River Road property with the subject he describes it as being comparable but far larger and with superior improvements. [66] He then says that the improvements are considered to add $400,000 to $450,000 in value to the property but does not explain how he estimated those figures. [67] With respect to 191 River Road, where the assessed unimproved value at October 2012 was $530,000 and the land value some six months later in March 2013 according to Mr Muchall is $400,000 to $450,000, then there is a drop in value of between $80,000 and $130,000 representing a reduction in the unimproved value of between 15% and 24.5% in that time. [68] Mr Muchall’s Sale 2 is of land located at 203 River Road Beaudesert which land is elongated tear-drop shape with what is effectively a battle-axe handle access driveway. It has an area of 22.13 ha and sold in January 2013, some 3½ months after the valuation date for $710,000. [69] That 203 River Road property has a low-set brick dwelling which from the photographs appears to be of relatively recent construction and of good quality. The property has four bores  one of which is equipped for stock water and one of which is equipped as a small irrigation bore. There are extensive horse facilities developed on the site including a large shed set up for stables and a double vet crush, two 29 Yeldam J in Joint Coal Board v Noone Pty Ltd (1984) 3 BPR 9440, 9451. -- 10 of 20 -- 11 stables with day yards, power, veterinary / lunch room, flood lights covering all small and some medium paddocks, five small paddocks, six medium paddocks all with horsefriendly fencing, three large paddocks and two river paddocks  all with water troughs. There is also a large shed, a three bay lockup garage with concrete floor and two bays open with a gravel floor. [70] Mr Muchall assesses the unimproved value as at $360,000 to $410,000. [71] With respect to Sale 2 if the assessed Valuer-General’s unimproved value in October 2012 was $450,000 and the value in January 2013 has come down to $360,000 to $410,000 then that constitutes a drop in value of between $40,000 and $90,000 (a reduction of between 9% and 20%). [72] Mr Muchall’s Sale 3 of a property located at 7748 Mount Lindesay Highway Beaudesert is again a sale of apparently an extensively improved property. That sale of land with an area of 8.01 ha took place in January 2013 at a price of $875,000. There are two dwellings on the site including one which was constructed in about 2001 comprising four bedrooms, three bathrooms, formal lounge and dining, big kitchen, rumpus room, outdoor deck area and a double lockup garage. [73] The second dwelling was similarly recently constructed (circa 2010) and comprises four builtin bedrooms, a media room, family room, dining room, play room, modern kitchen, deck area, swimming pool and double lock up garage. [74] In addition the property is fully fenced, contains 25 post and rail paddocks (the majority of which have shelter), a stable block with fourteen extra large stables, a wash bay and crush, an undercover area for three vehicles, a workshop area, horse walker, round yard, an arena, a high volume bore, underground irrigation, grass training track, bitumen roadways to paddocks and lighting for the pool. [75] Mr Muchall identified the Valuer-General’s unimproved value as at October 2012 of $305,000 and at the sale date in January 2013 Mr Muchall analysed an unimproved value of between $300,000 and $350,000. He describes that land as being comparable to the subject land given its similar size but the absence of a river frontage. By way of comparison with the subject he identifies it as having a more usable land area and superior accessibility. Again a comparison of the unimproved values in October 2012 and then in January 2013 shows a drop over that four month period of between 2% and about 13%. [76] Mr Muchall’s Sale 4 was of land with an area of 10.6 ha located at 54 Thiedke Road, Beaudesert. That property sold in October 2012 for $470,000. -- 11 of 20 -- 12 [77] Sale 4, although level in contour, was shown in an aerial photograph to be of an irregular triangular shape. [78] It is an improved lot with an older style low-set brick dwelling, post and wire fencing, a large machinery shed with three phased power, a workshop and a storage area. It is also divided into numerous paddocks with timber cattle yards, a loading ramp, and a water supply via bore, dams and tanks. [79] The valuation of the Valuer-General as at October 2012 was $285,000. [80] From that sale price of $470,000 Mr Muchall derives a land value of between $260,000 and $300,000. He considers the land slightly inferior on a price point as it does not have river frontage. [81] In his oral evidence Mr Muchall identified Sale 4 as having been a mortgagee sale.30 [82] Mr Muchall’s Sale 5 was of land located at 501 Christmas Creek Road, Tabooba. That sale, consisting of two irregularly shaped lots comprising an area of 16.35 ha, occurred at a price of $380,000. [83] Mr Muchall’s Sale 5 seems to be the most lightly developed of the sales upon which he relies. It is approximately twice the size of the subject but its improvements are limited to a small metal shed, a water tank, and a set of unused stock yards with wire and post boundary fencing. Its sale date was proximate to the date of valuation namely October 2012. [84] The Valuer-General’s assessed unimproved value as at October 2012 was $320,000. [85] As at the date of sale for $380,000 Mr Muchall opines an unimproved value of between $340,000 and $350,000. [86] Notwithstanding its allegedly inferior location Mr Muchall comes to the view that overall the land is superior on a price point given its much larger size. [87] I note that while Mr Muchall describes it as being two irregularly shaped lots the overlaid aerial photograph which accompanied his report exhibits a shape which is rather more regular than the rest of his sales. It might be described as an oblate regular shape. [88] Mr Muchall’s Sale 6 was of an 11.28 ha property located at 502 Christmas Creek Road, Tabooba. Mr Muchall describes the property as being irregular in shape and level in contour with extensive creek and road frontage. [89] It has improvements comprising a recently constructed low-set residential dwelling and a shed. The remainder of the property, he says, has minimal improvements other than post and wire fencing. 30 T 1  10 L 22. -- 12 of 20 -- 13 [90] The Valuer-General’s valuation of the property as at October 2012 was $300,000. Sale 6 occurred in October 2012 at a price of $550,000. [91] Mr Muchall’s assessment of the land led him to express the view that it has an inferior position being much further south from Beaudesert than the subject land but has good bitumensealed road access. [92] Mr Muchall describes his Sale 6 as being of a “much larger size”. That is a somewhat surprising contention given that the subject land has an area of 8 ha and Sale 6 has an area of 11.2 ha thus being only three hectares larger. I note also from the aerial photograph that part of the land comprising Lot 6 appears to be severed from what might be called the parent parcel by a waterline or creek line. That matter was not addressed by Mr Muchall. [93] Mr Muchall assesses the improvements as adding $220,000 to $250,000 in value to the property which leads him then to a value of the land within the range $300,000 to $330,000 based on the purchase price. [94] Mr Muchall concludes: “Overall the land is considered slightly superior on a price point notwithstanding its inferior location given its much larger size.” [95] I have already commented on Mr Muchall’s contention that it constitutes a “much larger” block. [96] Having considered all of his sales evidence Mr Muchall concludes that: “The properties with land areas similar to the subject (i.e. 8 to 11 hectares) have apportioned unimproved values from $260,000 to $350,000. Allowing for location, shape/topography, size, access and usable areas, these sales indicate that the subject property should have an assessed unimproved land value of $320,000 as at 1 October 2012.” [97] I pause to observe that nowhere in his report does Mr Muchall descend to identifying what might be regarded as “usable areas” on the land the subject of his comparable sales. One might assume that the totality of each lot constituted a usable area but that is far from clear from his report and from his oral evidence. [98] It is noteworthy also that nowhere in his report does Mr Muchall make any reference to the apparently flood prone nature of the subject land or the extent of flooding, if any, on the land the subject of his comparable sales. [99] Mr Muchall’s conclusions31 seems to largely ignore his Sales 1, 2 and 5 because he focuses on the sales which had area between 8 and 11 ha. Presumably he refers to Sales 3, 4 and 6. 31 Exhibit 3, page 4. -- 13 of 20 -- 14 [100] As a consequence of those matters set out in the proceeding few paragraphs the Court is left with a report which was, admittedly, not prepared for the purpose of evidence in an appeal before this Court, and which relies on improved sales with analyses producing an unimproved value which are not in any way particularised or explained. [101] I find it difficult to place any weight upon the evidence adduced by Mr Muchall as supporting the grounds of appeal identified in the notice of appeal which grounds are, after all, the matters which must be addressed in an appeal to this Court. [102] The objection by the appellant to the Valuer-General became an exhibit before the Court.32 [103] With respect to the second ground of appeal identified in the notice of appeal that objection says, in what is effectively an addendum to the objection: “Ground 1 - Not Supported by Sales” [104] That objection identified 191 River Road and 203 River Road which were Sales 1 and 2 in the report prepared by Mr Muchall. The Evidence of Ms Ashley [105] Ms Ashley had agreed with Mr Muchall that the appropriate approach to the valuation exercise she was required to carry out was a direct comparison approach having regard to sales within the district. [106] Her approach was to seek either undeveloped or only lightly developed land as the basis for her comparison. [107] In her report she observed:33 “Given the nature of the South East Queensland property market when comparing the subject property to sale properties, particular regard was had to overall value reflected in the sales analysis. Reference to the rates per hectare is not considered appropriate valuation methodology in these rural residential smaller site markets. It is appropriate, in this market, to consider the whole value rather than rates per hectare.” [108] In an attempt to place both the subject valuation and the valuation process in the general area of the subject land Ms Ashley went on to explain: “The rural living market since 2010 has seen very little movement with values generally holding across the board. A major valuation review was undertaken throughout the Scenic Rim Regional Council area during the 1/10/2011 revaluation program. During a stable property market major relativity adjustments were undertaken resulting in significant increases and decreases to existing values in some instances. During the 1/10/2012 revaluation program values were reduced slightly to reflect a softening in the market reflected through reduced sales activity and some evidence of pressured transfers.” 32 Exhibit 6. 33 Exhibit 4, page 5. -- 14 of 20 -- 15 [109] She explained in her report that the sales which she had used varied slightly from the subject properties zones with some of them being designated rural and some of them being “Mount Lindesay corridor” zones and representing a mixture of “countryside”, “equestrian activities” and “rural residential” precincts. She expressed the view that those various precincts, while differently named, are not considered in her opinion to be different from one another when a highest and best use of “rural living” was being considered.34 [110] Two of the four sales were in a different Local Government Area  namely the Logan City Council area  but were located within the countryside precinct of that Local Government and were of a rural nature. [111] She goes on to say that both of these sales considered by her adjoin Scenic Rim Regional Council and the Logan City Council area boundaries and, in her opinion, were not too far removed from the subject site. [112] She also points out that, in her view, Logan City Council and Scenic Rim Regional Council values generally moved in line for the 1/10/2012 revaluation. [113] She notes that there were limited vacant or slightly improved sales occurring in the immediate area of the subject land but the sales which she has identified she considers to be the most comparable and reliable sales evidence available for the relevant valuation date, namely 1 October 2012. [114] Ms Ashley’s Sale 1 was of land located at 880 Lamington National Park Road at Canungra. That property, otherwise described as Lot 4 on RP854891, had an area of 1.974 ha, a Rural Countryside Precinct zoning and limited improvements namely a four bay hayshed, a bore, cut and filled house pad and boundary fencing. [115] It sold on 3 April 2012 (some six months prior to the valuation date) for $530,000. [116] She analysed the unimproved value to a figure of $411,282. [117] Her report identified the total value of improvements as being $118,718 but nowhere in the report was there a proper and informative description of how that figure of $118,718 had been achieved. Again it is not a “speaking” report. [118] The Valuer-General’s valuation of that property as at 1 October 2012 was $350,000. [119] As I read her report and consider her oral evidence the analysed unimproved value of $411,282 compared to the applied value by the Valuer-General of $350,000 seems to suggestive that sales of largely unimproved land come in at a point somewhere above the market value ascribed by the Valuer-General. 34 Exhibit 4 page 6. -- 15 of 20 -- 16 [120] That property has 140 m of frontage to Canungra Creek and no flooding impacts. It has no access to reticulated water or sewerage and is located about 8 km south-west by road from the township of Canungra and about 40 km south-east by road from Beaudesert. [121] Her assessment of the property is as follows:35 “Overall the sale is considered inferior to the subject. It is smaller in area and is in an inferior location. It shares a similar aesthetic appeal with a waterfront location and outlook. The sale has superior access to the subject. The sale and subject are considered similar in use and have a similar level of services. The sale is located further from the Beaudesert Township than the subject. The subject also lends itself to some agricultural use whereas the sale is limited in this respect. Both the sale and the subject enjoy creek and river frontage however the sale is not affected by flooding. The sale is considered inferior overall.” [122] Ms Ashley’s Sale 2 was in respect of a 20.29 ha lot of land located at 2661 Beaudesert-Beenleigh Road, Mundoolun which land was otherwise described as Lot 3 on RP189635. [123] The land sold on 21 December 2012 for $500,000 and Ms Ashley provides an analysed unimproved value of $483,057. [124] That land was located within the Logan Shire and Ms Ashley expresses the view that values in that shire, at that time, were thought to be in line with those in the Scenic Rim Regional Council area. [125] She described the subject property in the following terms:36 “Irregular shaped easy to moderately sloping light forest block with short frontage to the Albert River. It enjoys good rural views and is not serviced with reticulated water or sewerage services. It has dual lane bitumen access and OH (overhead) power. There is an electrical easement that runs through the front of the property. Localised flooding occurs on the property along the river with approximately 10% of the land contained within the ‘Logan CC  Flood Regulated Area Map’ (see Appendix H). Designated Rural within the Countryside Precinct, the sale is approximately 16 km north-east of Beaudesert township and approximately 22 km north east of the subject. The property is lightly improved with boundary fencing and clearing.” [126] Ms Ashley considered that lot to be superior to the subject because it had a larger area and superior access with the somewhat elevated homesite. [127] She expressed the view that it had a somewhat inferior location being 16 km from Beaudesert (the subject site being by her estimation, approximately 6 km south west of the township37). [128] Overall she assessed the subject land as enjoying a similar level of services together with river frontage with some flooding impacts from the Albert River.38 35 Exhibit 4, Appendix A, Sale 1. 36 Exhibit 4, Appendix A, Sale 2. 37 Exhibit 4, page 4. 38 Exhibit 4, Appendix A, Sale 2. -- 16 of 20 -- 17 [129] She thought the sale was superior overall to the subject land having superior bitumen access and slightly less flooding impacts. [130] Ms Ashley’s Sale 339 was in respect of land located at Veresdale Scrub Road at Veresdale in the Logan Shire Council area. The property was otherwise described as Lot 1 on SP 260035 and had an area of 8.118 ha. It sold on 6 May 2013 at a price of $500,000 including improvements which consisted of fencing and clearing. [131] Ms Ashley analysed the unimproved value of that sale as being $481,000 and applied an unimproved value as at 1 October 2012 of $400,000. [132] She described that property as being regular shaped, good quality, vacant scrub block located approximately 10 km north by road of the Beaudesert township. She described it as having a good level contour with rural views and was predominantly cleared. [133] Unlike the subject the Veresdale Scrub Road property does not have river or creek frontage although there is a natural watercourse through the southern part of the block which experiences localised flooding. [134] In terms of comparison with the subject lot Ms Ashely says as follows: “The sale is considered to be slightly superior to the subject having superior bitumen access and slightly less flooding impacts. This sale is most comparable to the subject with size and location to Beaudesert very alike. Both properties have a quiet rural location with good rural views and are well located to Beaudesert.” [135] Importantly for her valuation exercise her Sale 3 was the one most comparable to the subject land with respect to both the size (8.118 ha versus 8.006 ha) and location, it being only 16 km north-east of the subject land. [136] Ms Ashley’s Sale 4 is of land located at 48-52 Spoonbill Road, Wonglepong. This land has an area of only 1.3 ha and is a vacant rural residential block located 26 km east by road of Beaudesert township and 6 km north of the Canungra township. It suffers from no flooding impacts at all and is lightly improved with only boundary fencing and some clearing. [137] Sale 4 sold on 15 May 2012 for a price of $247,000 which Ms Ashley (in an unexplained way) analyses to an unimproved value of $238,675 and a site value of $244,675. [138] As at 1 October 2012 the Valuer-General’s valuation applied to her Sale 4 was $205,000. [139] In her report she says:40 39 Exhibit 4, Appendix A, Sale 3. 40 Exhibit 4, Appendix A, Sale 4. -- 17 of 20 -- 18 “This sale is considered to be far inferior to the subject however it provides a bottom end value for acreage properties. This sale has an inferior location and a much smaller area. It does not enjoy river frontage and is overall vastly inferior.” [140] Apart from identifying an apparent “floor” price for rural residential property of 1.3 ha this particular sale does not provide much guidance to me. Conclusions [141] In coming to a decision in this case I must be mindful of the observations of the Land Appeal Court in BT Dillon v Valuer-General41 where it was said: “The Legislature has not given this Court any investigatory powers under the Valuation of Land Act. If the Appellant’s case is not strong enough in its own right to establish the values contended for or to disprove the Valuer-General’s values, the Court is not empowered of its own volition to probe the fairness or correctness of the Valuer- General’s values and by this means arrive at its own estimate of value.” [142] The Court is confronted by two quite different approaches to the valuation exercise which must be undertaken in this case. On the one hand, the appellant through its valuer has relied upon sales which are generally of improved properties in close proximity to the subject land, many of which sales occurred in what might be described as distressed circumstances. [143] On the other hand, the respondent through its valuer has relied upon either vacant or lightly improved land sold in an open market albeit for properties which are located some distance from the subject property but within proximity to the town of Beaudesert. [144] The appellant has also had to confront the difficulty as acknowledged by its expert and referred to above, that the report relied upon in Court was not really prepared for the purpose of a Court hearing. The arrangements between the appellant and its valuer were, of course, matters entirely for them and the Court is not entitled to insist upon more detailed or appropriate valuation evidence. [145] As the solicitor for the respondent has pointed out, the approach taken by Ms Ashley, the valuer called by the respondent, is consistent with the approach approved of in the decision of the Land Appeal Court in Hans and Else Grahn v Valuer-General42 where it was said that: “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: 41 (1986-87) 11 QLCR 231, 233. 42 (1992-93) 14 QLCR 327, 328  329. -- 18 of 20 -- 19 (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). (b) The best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land (WM and TJ Fischer 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 principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence (WM and TJ Fischer 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).” [146] In a similar vein the respondent was critical of the approach adopted by Mr Muchall for the appellant and drew the Court’s attention to the observations of Member Isdale in BWP Management Limited v Valuer-General43 in which His Honour observed: “Dealing with the challenge of finding the correct allowances for the added value of improvements has been something which has received considerable attention from the Land Appeal Court. In Tow v Valuer-General the Land Appeal Court said: ‘Courts of the highest authority 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.’ The same Court said in Clough v Valuer-General: ‘It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value. The reason is obvious. In applying such sales there is no room for error in analyzing the value of improvements. Because there is less room for difference of opinion as to value of the various items of improvement and comparison is thus simpler, it has been held that highly improved sales should be avoided in preference to sales comprising a lesser degree of improvement. In Tooheys’ case and Jowett’s case the method of ascertaining the improved value of the subject property and deducting the value of the improvements therefrom was adversely criticized. Whilst in some cases it may be appropriate to adopt the method, it seems to us that in the majority of cases it introduces additional items to value each of which can be the subject of a difference of opinion and thus increase not only the work load of the valuer and the Courts but also the difficulties and uncertainties of arriving at a reasonably correct unimproved value.’ 43 [2014] QLC 3. -- 19 of 20 -- 20 The Land Appeal Court also said in Fischer v Valuer-General: ‘It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels.’ These authorities were applied by this Court in Dunning v Valuer-General. The consistent line of authorities makes it clear that the Court will prefer the guidance of sales of unimproved or lightly improved land where such sales are available.”44 [147] I agree with the submissions made on behalf of the respondent. In doing so I mean no disrespect at all to Mr Scott who did his best as a layperson (albeit a very well- informed one) acting for the appellant but being without legal qualifications or experience so that it was probably unrealistic to expect that Mr Scott should have the capacity to draw the Court’s attention to the relevant cases and authoritative statements contained within those cases. [148] In all of the circumstances I am satisfied that Mr Scott has, on behalf of the appellant, failed to discharge the onus which the Land Valuation Act 2010 places upon him and accordingly the appeal must be dismissed. Order: The appeal is dismissed. WL COCHRANE MEMBER OF THE LAND COURT 44 Ibid [35][36] (emphasis added) (citations omitted). -- 20 of 20 --