Bolitho v Department of Natural Resources and Water [2006] QLC 69

LAND COURT OF QUEENSLAND CITATION: Bolitho v Department of Natural Resources and Water [2006] QLC 69 PARTIES: Dorothy E and Simon J Bolitho (appellants) v. Chief Executive, Department of Natural Resources and Water (respondent) FILE NO.: AV2005/0846 DIVISION: Land Court of Queensland PROCEEDING: An appeal against an annual valuation of land under the Valuation of Land Act 1944 DELIVERED ON: 27 October 2006 DELIVERED AT: Brisbane HEARD AT: Toowoomba MEMBER Mr RS Jones ORDER: The appeal is dismissed. CATCHWORDS: Valuation – comparable sales evidence – s.33 of Valuation of Land Act 1944 – presumption of correctness. APPEARANCES: Mr S Bolitho, for the appellants Mr M Heather, Senior Legal Officer employed by the respondent [1] Mr and Mrs Bolitho, the appellants, have appealed the unimproved value applied to their land by the Chief Executive Department of Natural Resources and Water, the respondent to the appeal. [2] The unimproved value applied to the appellants' land by the respondent is $128,000. The estimate of the unimproved value contended for by the appellants is $75,000. The relevant date for the valuation is 1 October 2004, effective 30 June 2005. -- 1 of 5 -- 2 [3] The appellants were represented by Mr Bolitho who was also the only witness called on their behalf. The respondent was legally represented, by Mr M Heather, a senior legal officer employed by the respondent and relied on the evidence of Mr B Taylor, a registered real estate valuer employed by the valuation firm JD Dodds. Issues in the appeal [4] The subject land is located in Palmerin Street Warwick, approximately 50 metres south of the corner of Palmerin and Grafton Streets. The land is more properly described as Lot 4 on Survey Plan 151262, Parish of Warwick, County of Merivale. The land is generally of a long and narrow rectangular shape, 596 m² in area and with a commercial building erected on the front half of the block. The land has been identified by Mr Taylor as having a zoning of "City Centre" and, consistent with that designation, it was being used at the relevant date for commercial retail purposes. [5] The evidence of Mr Bolitho was that the construction of a large shopping centre and associated works, including car parking on the northeastern corner of the intersection of Guy and Grafton Streets about 10 years ago, had a significant and negative impact on the income of businesses in Palmerin Street south of Grafton Street. I accept Mr Bolitho's evidence about this. [6] Relevant to this appeal, in their notice of appeal the appellants asserted that the valuation appealed against was wrong because it:  was unfair and unreasonable.  did not take into account appropriate sales evidence and was otherwise based on inappropriate sales evidence.  did not take a "proper account of improvements". [7] Consistent with s.3(1)(b) of the Valuation of Land Act 1944 (VLA), the land was valued by the respondent on the basis that the improvements on it did not exist. Importantly, pursuant to s.33 of the VLA, the valuation appealed against is deemed to be correct and therefore the appellants bear the burden of proving that it is wrong. Generally speaking, the presumption in favour of the correctness of the statutory valuation may be rebutted where it can be shown that it was based on the application of a wrong principle and/or involved a significant error of fact and/or was arrived at by a fundamentally erroneous method.1 Also of relevance in appeals such as this is that pursuant to s.45(4) of the 1 Brisbane City Council v Valuer General (1978) 140 CLR 41 at 56-57: see also G Cominos & Co Pty Ltd v Chief Executive, Department of Lands (1996-97) 16 QLCR 331 at 311-332 (LAC). -- 2 of 5 -- 3 VLA the appellants are limited to the grounds stated in their notice of appeal and bear the burden of proving each and every ground of appeal relied on. [8] The case for the appellants centred primarily around an attack on the sales evidence relied on by Mr Taylor. This attack had two limbs. The first was that a number of his sales were not able to be sensibly compared to the subject. The second was that, in respect of the more reliable sales evidence, Mr Taylor's allowances for improvements on the land were too low and size and locational differences were not sufficiently taken into account. [9] At the end of the day both Mr Taylor and Mr Bolitho agreed that the most comparable land was that located at 153 and 107 Palmerin Street. These are Mr Taylor's Sales 3 and 4 respectively and would, generally speaking, be affected in a similar way by the shopping centre in Grafton Street as the subject land. [10] Mr Taylor in my opinion quite properly conceded that little weight could be given to his Sale 1 and his "after date sale" in Wood Street. Sale 1 was probably a transaction involving a materially inflated sale price. The Wood Street sale involved land situated in a materially different location and a purchaser who was already a tenant of the land and improvements thereon and a vendor who was, apparently at the time of the sale, "undergoing personal difficulties". It is also my opinion that, in the circumstances of this appeal, Mr Taylor's Sale 2 is of no real assistance. It is much larger than the subject land and is situated in a more commercially desirable location nearer to the large shopping centre already referred to. [11] Turning to Mr Taylor's Sales 3 and 4 it was put on behalf of the appellants that Sale 4 was superior to the subject and Sale 3 slightly inferior in respect of location. However, as I understood their argument, the main complaint was that Mr Taylor had undervalued the improvements on the respective lots. [12] It seemed to me that, in criticising the value Mr Taylor applied to the improvements on the sale properties, Mr Bolitho was heavily influenced by the actual costs that would be involved in replacing the buildings and associated works on the land. However, the cost of replacing a particular building need not equate to the value of that building in the market place at any given point in time. [13] In respect of this issue ss.3(1)(b) and 3(2) of the VLA relevantly provide: "3 Meaning of "unimproved value" (1) For the purposes of this Act - unimproved value of land means - (a) … -- 3 of 5 -- 4 (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. (2) However, the unimproved value shall in no case be less than the sum that would be obtained by deducting the value of improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this act." (emphasis added) Section 4 of the VLA defines the meaning of the phrase "improved value" in the following terms: "improved value" means, in relation to land, the capital sum which the fee simple of the land, including improvements, might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require. Finally, in the context of this appeal, s.5 of the VLA is concerned with the meaning of the phrase "value of improvements" and provides: (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 licence 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 effecting, 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. (emphasis added). [14] Having regard to the totality of the evidence concerning this issue the best evidence concerning the value of the improvements involved in Mr Taylor's Sales 3 and 4 is that provided by Mr Taylor. It is my opinion that Mr Taylor's evidence about this issue was not seriously challenged and no probative evidence to the contrary was advanced on behalf of the appellants. [15] In respect of the other matters raised on behalf of the appellants concerning those sales, I accept that some adjustments would also have to be made in their application to the subject to take account of differences including size and location. However, in my opinion, the appellants were not able to show that, in applying these sales, Mr Taylor had failed to take into account the material differences and make any necessary adjustments. In this context, the appellants did not put forward any evidence of other sales which supported their case or which tended to undermine the value contended for by the respondent. [16] For the reasons canvassed above, I have reached the conclusion that the appellants have failed to prove that the respondent's assessment of the unimproved value applied to the land is wrong and ought be varied. Accordingly, the appeal must be dismissed. -- 4 of 5 -- 5 Order The appeal is dismissed. RS JONES MEMBER OF THE LAND COURT -- 5 of 5 --