Boysen v Department of Natural Resources, Mines and Water [2006] QLC 55

LAND COURT OF QUEENSLAND CITATION: Boysen v Department of Natural Resources, Mines and Water [2006] QLC 55 PARTIES: Boy and Ilse-Brigitte Boysen (appellants) v. Chief Executive, Department of Natural Resources, Mines and Water (respondent) FILE NOS: AV2005/0977 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under Valuation of Land Act 1944 DELIVERED ON: 11 September 2006 DELIVERED AT: Gatton HEARD AT: Toogoolawah MEMBER: Mr PA Smith ORDERS: The appeal is dismissed. CATCHWORDS: Valuation – Factors in valuation – Impact on rates - Presumption in favour of correctness of valuation – Valuation of Land Act 1944 APPEARANCES: Mrs Boysen on behalf of the appellants Mr M Heather, Senior Legal Officer, Department of Natural Resources, Mines and Water, appeared for the respondent Background: [1] This is an appeal by the appellants against a valuation by the respondent, pursuant to the Valuation of Land Act 1944 (the VLA) which valued the appellants' property situated at 70 Beeston Drive Fernvale in the sum of $72,000 as at 1 October 2004. The appellants contend for a valuation of $30,000 to $35,000. [2] The land has power, telephone and trickle supply potable water connected, and is serviced by rubbish collection. The area of the land is 2000m2 and is of regular rectangular shape. Lowood is located 8km to the west and Ipswich CBD is 24km to the southeast. The block is located on the upper slopes of a small, steeply sloping gully. At -- 1 of 5 -- 2 the front, northern corner of the block is a ridge, which creates a platform for a slab type house. Housing on posts could be constructed at other locations on the block, but this would become progressively much more difficult the further down the slope one went. The property is part of a residential development in Fernvale, initially established in the early 1990’s. Most buildings in the residential development are good quality brick and tile dwellings, although the development also includes some high quality dwellings and other lesser quality dwellings. At its highest elevation the land commands an elevated outlook of residential and rural land to the north. Views to the south are obstructed by trees. The land is designated "Township" under the Esk Shire Council’s Planning Scheme, within the "Park Residential Precinct". Its highest use is residential. [3] The appellants were represented by Mrs Boysen. Both Mr and Mrs Boysen gave evidence at the hearing. Mrs Boysen has no legal or valuation qualifications. The respondent was represented by Mr M Heather, a senior legal officer employed by the respondent, and relied on evidence of a registered valuer, Mr C Clark. In company with the parties, I conducted an inspection of the subject property as well as the comparison sales properties. Relevant legislative provisions [4] Pursuant to s.13 of the VLA, the respondent is required to determine the unimproved value of the land. Relevantly, s.3(1) of the VLA says as follows: "3.(1) For the purposes of this Act – ‘unimproved value’ of land means – (a) in relation to unimproved 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; and (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.” [5] I note that the subject land in this matter is improved. Accordingly, put simply, the task is to find the market value of the land on the assumption that none of the improvements are on the subject land. An assessment is then undertaken as to the highest and best use of that land. [6] As the President said in Fairfax v Department of Natural Resources and Mines [2005] QLC 0011 at paragraphs 11 and 12: "[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 -- 2 of 5 -- 3 land and the likelihood of a rise or fall in the value of the 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.'" I respectfully agree with these observations. Presumption of correctness of valuation [7] I now turn to section 33 of the VLA, which states as follows: "33 Status of valuation 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." [8] This section was considered by the High Court in the case of Brisbane City Council v The Valuer-General for the State of Queensland 1977-78 140 CLR 41 where Justice Gibbs (as he then was) made the following observation at page 56: "In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s. 13(7) is rebutted." It should be noted that s. 33 of the VLA is in essentially the same terms as what was then s. 13(7) of the Act. The issues in the Appeal [9] The appellants lodged their notice of appeal1 in this matter by post on 13 September 2005 following the respondent’s decision on objection dated 2 August 2005. The appellants grounds of appeal essentially are that the value of the land has not substantially increased since the last valuation; other properties in the same general locality of double or treble the size of their property can be purchased for $72,000; the property is not connected to town sewerage; the property is steep; they have some difficulty with some neighbours; there is a poor bus service to Ipswich and none to Lowood; and there are no medical services in Fernvale. [10] Unfortunately, the appellants’ lack of understanding of unimproved valuation principles was demonstrated by both their notice of appeal and their evidence. For instance, their material provided with the notice of appeal contains the following statements: "From our own experiences: We were told by Real Estate Agents, when we sold previous houses: 'The buyer does not want to pay for a beautiful garden or property but for a house only.' When the banks give out a mortgage, they are valuating only the house, but not the property. Therefore, the 1 Exhibit 1 -- 3 of 5 -- 4 unimproved value of the property should not be calculated from the sales price……We ourselves, we are not interested in selling our property ever again. As age-pensioners, we settled here in Fernvale for good. Therefore, we won’t have anything from higher revaluations, except higher Council-Rates. Those rates have already risen after this new valuation…..The valuation that the Department of Natural Resources does, are not meant to reflect possible future growth or the highest prices ever reached in an area, no reputable valuer would ever do that." [11] I have no doubt that the appellants, as pensioners, honestly believe everything they have put into evidence in this matter, and are genuinely concerned about increasing values impacting on them through higher rates. However, it is not the role of this court to determine appeals such as this on any basis outside that of the VLA and decided precedents. Specifically on the point of large increases in valuations and council rates increases, the Land Appeal Court had this to say in Tow v The Valuer-General2 at page 381: "It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation. The Valuer-General and the Court are concerned with finding unimproved value and not with the amount of rates that may be levied as a result." [12] A direct comparison approach has been adopted by the respondent’s valuer to determine the unimproved value of the land. As is so often the case in matters such as this, the issues basically all come down to market evidence. This is reflected in the sales evidence set out in Mr Clark’s report. Mr Clark’s evidence relates to three sales as follows: Sales Area M2 Date of Sale Analysed U/Value Applied U/Value 1/10/2004 Comparison 1 Mamaku St FERNVALE 2007 22/03/2004 $69,750 $67,000 Inferior 2 Christella Ct FERNVALE 4001 04/05/2004 $87,000 $82,000 Superior 3 Beeston Drive FERNVALE 4020 12/12/2004 $78,500 $56,000 Inferior [13] I accept the valuation evidence of Mr Clark. In my view, the sale which best compares to the subject is Sale 1. While it is of similar size to the subject property and has a similar elevation and also falls away from the road (although its slope is easier), it does not benefit from a ridge like the subject does; Sale 1 is subject to an easement; and the block is an irregular shape, narrowing substantially as it goes back from the street. I agree that the property is inferior. Accordingly, the subject property must be valued at something above $67,000. Whilst some points made by the appellants as to the particular 2 1978 5 QLCR 378 -- 4 of 5 -- 5 disabilities of their property have merit, on the basis of the evidence in its entirety those points are not sufficient to disturb the presumption of correctness of the valuation.3 [14] Having considered all of the evidence before me, and applying the relevant authorities, I am not satisfied that the valuation of $72,000 involves a significant error of fact or was arrived at by a fundamentally flawed method. Conclusion [15] For the reasons set out above, I have reached the conclusion that the appellants have failed to establish that the respondent’s assessment of the unimproved value should be reduced to $30,000, or in any amount at all. It follows that the appeal must be dismissed. The valuation of the subject land is accordingly affirmed in the sum of $72,000. Order The appeal is dismissed. P A SMITH MEMBER OF THE LAND COURT 3 see paragraphs 7 and 8 above -- 5 of 5 --