Cassimatis v Department of Natural Resources, Mines and Energy [2004] QLC 29

LAND COURT OF QUEENSLAND CITATION: Cassimatis v Department of Natural Resources, Mines and Energy [2004] QLC 29 PARTIES: Emanuel G, Kiparisoula G and Stella E Cassimatis (applicants) v. Chief Executive, Department of Natural Resources, Mines and Energy (respondent) FILE NO: AV2003/0128 DIVISION: Land Court of Queensland PROCEEDING: Appeal against valuation under the Valuation of Land Act 1944 DELIVERED ON: 7 April 2004 DELIVERED AT: Brisbane HEARD AT: Coolangatta MEMBER Mr RP Scott ORDER: The appeal is dismissed and the valuation of the Chief Executive in the amount of One Million, One Hundred Thousand Dollars ($1,100,000) is affirmed. CATCHWORDS: Statutory Valuations - Valuation of Land Act 1944 - Percentage increase in value - Increase in rates - Comparison with sales APPEARANCES: EG Cassimatis as agent for the appellants. GJ Smith, Senior Legal Officer, Department of Natural Resources, Mines and Energy for the respondent. [1] This is an appeal which arises under the provisions of the Valuation of Land Act 1944. The property, the subject of the appeal, was valued by the Chief Executive as at a relevant date of 1 October 2002 in the amount of $1,100,000. The appellants contend for a value -- 1 of 8 -- 2 of $500,000 and accordingly objected, then, failing to convince the Chief Executive of the merit of the objection, appealed to this Court. [2] The subject appeal was heard in "tandem" with Appeal 2003/0127 on the basis that evidence in one appeal could be received as evidence in the other to the extent that such evidence would be relevant. The appellant in appeal 2003/0127 is Mr Cassimatis’ mother Mrs KG Cassimatis. She gave evidence in her appeal. A separate judgment has been prepared in each case as each of the appeals was heard separately. [3] In the instant appeal the appellants were represented by Emanuel Cassimatis who gave evidence. Mr Cassimatis lives on the subject property and described himself as a property investor. Gregory Patrick Crowley, a registered valuer, provided evidence in support of the Chief Executive’s valuation. [4] The subject property, Lot 44 on Registered Plan 3147, has an area of 405 m² and is located at 78 Marine Parade, Miami, approximately 10 km south of the Southport Central Business District. [5] Mr Crowley described the subject property as being located in a "prestigious ocean-front neighbourhood comprising mixed densities of residential and tourist accommodations, with good shopping, education and entertainment facilities in close proximity". [6] Marine Parade is a two-lane road with bitumen kerb and channel providing what Mr Crowley described as good access to the subject. Marine Parade separates the subject property from the beach with its adjoining park-like esplanade frontage. [7] The usual services are supplied to the subject property. [8] The land comprises a regular shaped lot with easterly aspect providing views over the esplanade to the surf beach and the ocean. The quality of these views was a matter of debate between the parties. The land comprises sandy coastal country with an easy slope from the frontage at Marine Parade to the rear boundary. A sewer line runs along the rear of the property. This line was not mentioned in Mr Crowley’s valuation report, however he later mentioned it orally and said that he had taken into account the presence of that sewer line in his valuation approach. The appellants did not challenge that evidence, nor complain about any aspect regarding the sewer line. [9] The subject property is zoned "Residential Duplex Dwelling" under the City of Gold Coast Planning Scheme gazette on 24 February 1994 and is used for a single residential dwelling. Mr Crowley said that he valued the land on the basis of its use, explaining that he understood he was required to approach the valuation in that manner having regard to the provisions of s.17 of the Valuation of Land Act which relevantly provides: "17.(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, -- 2 of 8 -- 3 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. (2) In subsection (1) - 'single dwelling house' means - (a) a dwelling used solely for habitation by a single household; or" [10] The grounds of appeal were contained in a comprehensive statement which I need not repeat here as the grounds become apparent in the content of my reasons below. [11] The first ground of appeal which falls for discussion is the complaint by the appellants that the rate of increase of value of the subject property under the provisions of the Valuation of Land Act is excessive. A statement provided by Mr Cassimatis revealed that the subject land had maintained a valuation of $320,000 for three valuation periods, then had increased to $375,000, then $500,000 then $800,000 until, for the valuation now under appeal, the figure became $1,100,000. This latest increase from the preceding valuation was calculated by Mr Cassimatis to be 37.5%. [12] I should say first of all that the only valuation which falls for my consideration is that which is the subject of the appeal before me. [13] The appellants express particular concern as to the level of local authority rates that are payable or would be payable by them based on the Chief Executive’s valuation which is under consideration, as well as land tax that might be levied by the State Government based upon that same valuation figure. [14] Rates of increase in statutory valuations, the level of local authority rates payable and land tax that might be levied are not matters properly calling for consideration in an appeal against value under the provisions of the Valuation of Land Act. That was made clear by the Land Appeal Court in NR and PG Tow v Valuer-General (1978) 5 QLCR 378: "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. Rates are fixed by Local Authorities and may be varied annually according to the fiscal requirements of the Local Authority concerned. Any such variation may be made at any time during a valuation period and may be entirely independent of a new and increased valuation." -- 3 of 8 -- 4 [15] There are various matters which Mr Cassimatis characterised as disadvantages of the subject property which he said the Chief Executive had not taken into account in the valuation. The first of these suggested disadvantages can be easily disposed of. [16] Mr Cassimatis said that the subject property was too small to be developed for high-rise purposes and its dimensions were such that it was not able to be developed as a duplex. That complaint does not arise for consideration as Mr Crowley has valued the subject land as a single dwelling. That was its actual use at the relevant date for valuation. [17] Mr Cassimatis said that only 50% of the subject property is able to be employed in the development of a construction on it, a construction which is limited to two levels. The limitation on development is a common one and one which I readily understand, however Mr Cassimatis did not demonstrate to me how this limitation was in some way peculiar to the subject property. In particular, he did not suggest that the limitation was not relevant to the sale properties mentioned in Mr Crowley’s valuation and to which I refer below. [18] Issues of particular significance to the mind of Mr Cassimatis was the traffic disability which affected the subject property, in his view and the presence of car parking on Marine Parade opposite the subject property. It will be convenient if I deal with these two matters together at this stage. [19] Mr Cassimatis described Marine Parade as a very busy two-way road used daily by tourists, beachgoers, school buses, noise hire-motorbikes, ice-cream vending trucks, commuters, Council trucks, etc. He said that the situation becomes chaotic during weekends and holiday periods, but apart from those times the street is used daily as an alternative route for those drivers travelling between Miami and Surfers Paradise who wish to avoid traffic lights and suchlike. [20] He said that vehicles using Marine Parade travel at excessive speeds. He said also that the high volume of traffic means that unhealthy exhaust fumes are emitted and are transported into the house on the subject land by prevailing sea breezes. He indicated that this particular disability affected the subject property because the house constructed on it is constructed at ground level only. That is not a matter, however, that I can take into account as I must consider the property as unimproved and in that respect it has the potential, as I understand it, for development as a two-level structure. [21] Car parking is allowed in what I would describe as an "end in" format on Marine Parade opposite the subject property. This usually means that vehicle exhausts are directed towards the subject property. During weekends and public holidays that car parking is heavily used and vehicles also park on the side of Marine Parade to which the subject property has its frontage. I understand that the presence of the larger of these vehicles -- 4 of 8 -- 5 would inhibit the view towards the beach and ocean from the ground level of the subject property, but that those inhibitions would disappear at a first-floor level. I return to the matter of views below. [22] Mr Cassimatis said that there is illegal overnight camping in the car-park area opposite the subject land. He said that noise in the form of people yelling and laughing and playing loud music can be heard on the subject land. He said also that there were several barbecues on the grassed area which adjoins the car park, with the result that during the day and at night the home on the subject property is filled with cooking smells. Rubbish is blown onto the subject land from the esplanade. [23] Disadvantages of the type raised by Mr Cassimatis cannot be considered in a vacuum, but as matters taken into account in the process of valuation. Where a valuation is being carried out by the method of comparison with sales – the method employed by Mr Crowley – it is in that context that the disadvantages can be considered. The process to be employed is one where disadvantages and advantages are taken into account by way of a process of adjustment (Waalt Homes v Road Construction Authority (1987) 64 LGRA 346). [24] It will be convenient at this stage to refer to the sales relied upon by Mr Crowley. [25] His Sale 1 took place on 2 July 2002 and involved the sale of a property at 54 Marine Parade, Miami. The sale property has an area of 405 m², is zoned "Residential Duplex" and sold for $1,700,000. Mr Crowley analysed the sale by deducting improvements at $50,000 to produce an analysed figure of $1,650,000. The value applied to the sale property by the Chief Executive was, however, $1,100,000 based on a previous sale of the property in December 2001 for $1,300,000. At the time of the adoption of that applied value the Chief Executive was not aware of the sale of 2 July 2002. [26] The sale property is situated approximately 120 metres to the south of the subject land, has similar services and access to the subject land and was considered by Mr Crowley to be similar to the subject. The sale land is a regular shaped lot comprising sandy coastal country with an easy fall from the road to the rear and has views over the beach and ocean to the east. [27] There was at the time of sale a highset fibrous cement home circa 1950’s on the land. Mr Crowley’s investigations reveal that homes of this type are typically demolished to allow the redevelopment of new and more substantial homes. It is therefore this market that the purchaser of the sale land was part of. Mr Crowley adopted a nominal holding value for the improvements on the land. The approach employed by him has been approved by the Court on many previous occasions. -- 5 of 8 -- 6 [28] Mr Cassimatis said that the Sale 1 property was superior to the subject property in that the sale did not have a car park opposite its frontage. Mr Crowley gave evidence that there is parking nearby. He said that the area in the vicinity of the sale property was populated by a number of trees that provided shade for cars which parked in the area and it was perhaps this feature which attracted more traffic to the road at the front of the sale property than was attracted to the road fronting the subject. [29] Mr Crowley also said that views from the Sale 1 property were inferior to the subject as trees located towards the beach inhibited the views. Mr Cassimatis said that the trees in question were Casuarina species which had a limited life, whereas a Pandanus towards the front of the subject property posed a greater potential threat to the views from there. In an apparent contradiction, he also said that the views which included trees would be preferred to views which took in a car-park area. I note his evidence and that of Mrs Cassimatis, however, that the car park would be utilised mainly at weekends and on holidays and that had I ventured there at the time of hearing I may have found perhaps one car there. On the other hand, the trees are constantly present though the Pandanus referred to by Mr Cassimatis does not, according to photographic evidence, pose any real threat to the view. Mr Cassimatis also mentioned that trucks and buses using Marine parade opposite the subject property would impinge its views. I would think that the same comment would apply to Mr Crowley’s Sale 1. [30] Mr Crowley’s Sale 2 is located at 118 Marine Parade, Miami, approximately 280 metres north of the subject land. The sale took place on 11 September 2002 for a price of $1,600,000, which Mr Crowley analysed to an unimproved figure of $1,550,000. He deducted $50,000 as a nominal holding value for the house on the property, employing similar reasoning to that which he applied in the case of his Sale 1. The sale property has an area of 405 m² and is zoned "Residential Multi Unit". The applied value to the sale property of $1,100,000 was settled on by the Chief Executive based on the earlier sale in December 2001 of the Sale 1 property. [31] Mr Crowley considers that the situation and services of the sale property are similar to that of the subject, whilst access to the sale is superior to the subject in that rear access from Nagel Avenue is available to the sale property. He said that the sale property is similar in country to the subject, however is lower in elevation with a high dune formation to its east which would restrict ocean views to the first floor only. Overall he considered the sale property to be comparable to the subject. [32] Mr Cassimatis drew attention to the zoning difference between the properties, suggesting that the sale property was superior to the subject land. The local authority zoning does -- 6 of 8 -- 7 not create the highest and best use of land, but is one of a number of considerations to be taken into account in determining what that highest and best use might be. Mr Crowley’s evidence was that the highest and best use of the sale property was clearly for single-unit residential purposes similar to the highest and best use upon which he had based the value of the subject land. I accept that opinion. [33] Mr Cassimatis said that there are no public barbecues near the sale property, the implication being, as I understand it, that the sale land therefore was superior in that respect to the subject. No attempt could reasonably be made to adjust the value for such a minor and singular consideration, in my view. [34] The ascertainment of value in accordance with the Spencer principle is best done by the use of comparable sales evidence described by Stephen J in River Bank Pty Ltd v Commonwealth (1974) 48 ALJR 483 at p.484 as “the conventional valuation technique. [35] No sales evidence was produced on behalf of the appellants. I realise that Mr Cassimatis is not a valuer and that undertaking a valuation in the absence of expertise possessed by a member of that profession poses a considerable difficulty; however it is not a difficulty that I can correct by stepping into the threshold. My task is to hear the evidence and consider it as it falls. That is expressed clearly in Qualischefski & Ors v Valuer-General (1979) 6 QLCR 167, at p.172: "However upon appeal a statutory onus of proof is cast upon the appellant and he has to accept, within the confines of the grounds set out in his Notice of Appeal to the Land Court, the burden of proving the Valuer- General incorrect. Neither this court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-General to substantiate his case. This is in contradiction 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 valuations made by the Valuer-General in respect of comparable properties." [36] Mr Crowley has employed an accepted valuation method and, not unexpectedly, was able to supply generally superior evidence relevant to the issue of value than came forward from Mr Cassimatis or from his mother in the other appeal under consideration. [37] The evidence points quite clearly to the attraction of esplanade residential lots in the marketplace in spite of there being disadvantages that accompany that obvious attraction. It may be that Mr Cassimatis sees the disadvantages as outweighing the attractions that the marketplace pays value for, however it is the general marketplace considerations that need to be applied in a case such as this, not subjective considerations. The leading -- 7 of 8 -- 8 authority on the question of the legal concept of value is Spencer v The Commonwealth of Australia (1907) 5 CLR 418 at 431, where at p.432, Griffith CJ said: "… In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?' It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together." That case makes it quite clear that the test of value is an objective one. [38] I have not been convinced that the Chief Executive’s valuation was based on any material error of fact or law. Mr Crowley appears to have done a competent and objective job, was well aware of the various issues raised by the appellants and took them into account. [39] Accordingly the appeal is dismissed and the valuation of the Chief Executive in the amount of One Million, One Hundred Thousand Dollars ($1,100,000) is affirmed. RP SCOTT MEMBER OF THE LAND COURT -- 8 of 8 --