Duus v Department of Natural Resources, Mines and Energy [2004] QLC 22

LAND COURT OF QUEENSLAND CITATION: Ruby Duus v Department of Natural Resources, Mines and Energy [2004] QLC 22 PARTIES: Ruby Alexandra Duus (applicant) v. Chief Executive, Department of Natural Resources, Mines and Energy (respondent) FILE NO: AV2002/0377 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 31 March 2004 DELIVERED AT: Brisbane HEARD AT: Coolangatta MEMBER Dr NG Divett ORDER: The valuation of the Chief Executive is set aside, and the unimproved value of Lots 4 and 5 on RP 1978 is determined in the sum of Six Hundred and Eighty-Five Thousand Dollars ($685,000). CATCHWORDS: Valuation – Sales evidence – Use of Sales – Whether scarcity evident – Maurici distinguished. Valuation – Method of valuation – Average increases rejected – Mass appraisal system explained. APPEARANCES: Mr RA Duus for the appellant Mr G Smith for the respondent Background: [1] This matter deals with land at 62 Woodgee Street, Currumbin, and described as Lots 4 and 5 on RP 1978, Parish of Tallebudgera. The subject land has an area of 819 m² and is -- 1 of 16 -- 2 located about 16 kilometres south of the Surfers Paradise Mail Centre, and about 200 metres from the nearest surf beach. Access to the frontage to Woodgee Street is good, although the land falls steeply to the rear from the street frontage. Woodgee Street is bitumen sealed with concrete kerbing and channelling. All normal urban utility services are available. The subject land is zoned Residential Duplex Dwelling under the Town Plan of the Gold Coast City Council of 24 February 1994, effective at the date of valuation of 1 October 2001. The key issues are the nature of the land, changes in the valuation, the method of valuation, relativity and comparison of sales. [2] On 25 February 2002 the Chief Executive issued a valuation of the subject land at $710,000. Following an objection the Chief Executive confirmed that figure on 25 June 2002. The appellant has now appealed claiming the unimproved value should more properly be $350,000. [3] Following an unsuccessful Preliminary Conference before the Judicial Registrar of this Court, the matter went to hearing on 8 October 2003. Ross Andrew Duus, the son representing the estate of Ruby Alexandra Duus, appeared and gave evidence for the deceased appellant, also calling evidence from Damien Patrick Francis Hocart, a registered valuer. Mr G Smith, Senior Legal Officer represented the respondent, calling evidence from Gregory Patrick Crowley, the departmental senior registered valuer responsible for determining the valuation. With the consent of both parties a joint inspection of the property and sales was undertaken. History of the Appeal – [4] The subject land is currently developed with a small cottage that is just over 100 years of age. The appellant has owned the property since 1967, and the history of valuations of that parcel reveals that in about 1987 an objection conference with the Chief Executive confirmed that ocean views existed along Murraba Street from the subject land. [5] Mr Crowley advises that originally the subject land (Lots 4 and 5) had been a corner site at an unnamed and unformed road and Woodgee Street. (Registered Plan 1978). Subsequently in 1988 the unformed road had been closed and is now Lot 420. (Exhibit 6, page 7). The subject land is therefore an inside parcel fronting Woodgee Street. Changes in the Valuation – [6] Mr Duus provides references to a series of newspaper articles which appear to demonstrate that the percentage increase in the valuation of the subject land exceeds nearly every other area on the Gold Coast (Exhibit 3). He draws particular attention to -- 2 of 16 -- 3 the increase in the subject land at the relevant date from $227,500 to $710,000 (212% - Exhibit 7), which he notes is to be compared with the prime oceanfront lands at Main Beach (59%) and Mermaid Beach (42%). He argues those comparisons are not reasonable. [7] Mr Crowley rejects those comparisons which he notes merely refer to average unimproved values, which represent many different properties in those areas, each with different types of land and factors influencing those valuations. He argues that the use of average values is an unsound method of valuation. Nature of the Land – [8] It is agreed that the subject land is a steeply sloping parcel falling from the street alignment to the rear boundary. There are filtered ocean views between large pine trees along Murraba Street to the north-east. Heavy vegetation to the north and south of Murraba Street restricts views of the water, although some of the vegetation near power lines to the north of Murraba Street has been cleared subsequent to the date of valuation. [9] There is a small open parkland called Clark Park immediately across Woodgee Street from the subject land. The presence of that open space parkland guarantees against likely obstruction of views from future building activity. However there is a concrete water pumping station and exhaust pipe within the parkland. The height of the concrete water pumping station varies across the sloping parkland from 1 metre at its eastern corner to 2 to 3 metres at its western corner. The pump station is well below the level of the carriageway in Woodgee Street. The park has existed for about 25 years. [10] The rear area of the subject land has a south-westerly aspect and has a bush outlook, with views of the adjoining hospital complex through the trees at the rear. Mr Crowley sees the subject land as having no drainage problems due to its steep nature, while Mr Duus explains that the rear of the parcel is regularly subject to flooding from surface flows during heavy rainfalls from the lands higher in elevation, and is virtually the stormwater outlet for all of the higher properties. Mr Crowley concedes that point, which he notes would be consistent with his assessment of the subject land as a very steep parcel. [11] It is also agreed that the subject land is regularly overflown by commercial aircraft on descent to Coolangatta Airport, and as such, any building development along Woodgee Street in that locality would be restricted to two storeys in height. Mr Duus provides photographs of adjoining dwellings in Woodgee Street confirming that understanding. (Exhibit 3). Mr Crowley agrees that such height restrictions at the front alignment level to two storeys would significantly enhance the current ocean views seen from the footpath -- 3 of 16 -- 4 level. He has accordingly allowed for the potential of those better ocean views in his valuation, which is based upon the highest and best use of the land. [12] Mr Crowley argues that while the existing cottage has an advantage in being located very near the front alignment to Woodgee Street, any new dwelling would most likely be restricted to a 6 metre setback alignment. However with modern construction methods, Mr Crowley argues that two storeys above the Woodgee Street level would be a reasonable development style for the subject land, in spite of the steep sloping nature of the parcel. He argues the existing adjoining buildings demonstrate that point. [13] Mr Duus advises of the difficulties he has experienced in 1967 in constructing a boulder retaining wall about half way down the sloping parcel. That wall is used to provide a small flatter area for parking of a four wheel drive vehicle off Woodgee Street. Mr Crowley has not valued the subject land as an improved site, but rather drew comparisons with sales of vacant or lightly improved lands in determining the unimproved value of the land. Accordingly he has made no allowance for the added value of the retaining wall. [14] Mr Hocart also concedes that the best views from the subject land are towards the east to the ocean, but agrees that even where there are partly obscured views in two directions, such as to the south-west on the subject land, then the land would sell for more. However Mr Hocart sees the ocean views to the north-east as being limited in nature from the height of the footpath. [15] Because of its zoning as “Residential Duplex Dwelling” Mr Hocart has valued it accordingly, and sought comparisons with sales of similar zoning potential. Mr Crowley sees the highest and best use as for a single residence under s.17 of the Act, and has sought sales for comparison where single dwellings are proposed. Mr Hocart sees the rear portion of the subject land as adding little value, and has valued the land virtually as a 405 m² site. [16] Mr Crowley rejects that conclusions, arguing that the rear portion of the land assists in providing the required open space provisions on the parcel. Accordingly he argues that the total area of 819 m² must be considered. Mr Crowley agrees that if the total area of the parcel was at the same height of the front alignment, then the parcel would have a much higher value than the current $710,000. He agrees that the principal problem with the subject land was in building on the very steep parcel. [17] A key difference between the parties lies in their understandings of the impact of traffic upon the subject land. Mr Crowley in preparing his valuation had only a general idea of the safety aspects in Woodgee Street in respect of speeding traffic through the area. He had provided for those impacts, and a shortage of on street parking in his valuation. -- 4 of 16 -- 5 However Mr Duus advises that the subject land is in fact in the most vulnerable position along Woodgee Street due to the nature of the curved road alignment outside the subject land. He advises of a history of accidents and damage to street furniture at the subject land, and provides copies of correspondence with the Gold Coast City Council (the Council), in respect of seeking traffic calming in Woodgee Street. The Council’s response has not yet been totally agreed, and speeding traffic remains an ongoing problem. Mr Duus advises further that the Council has restricted access to a single entry point for vehicles on the subject land. [18] Part of the traffic problem is exacerbated by the very narrow carriageway width (5 metres) near the subject land, and the fact that the existing cottage is only 2 metres from the kerb line. Parking outside the subject land is therefore prohibited, although Mr Duus advises that Council service vehicles tend to ignore those restrictions when they cannot park in the unofficial car park in a sealed area across Woodgee Street, about 50 metres south-east of the subject land. (Exhibit 3, figure 7D). Mr Duus sees the traffic problem as being one of potential damage to the subject cottage, while Mr Crowley sees it more as a general potential risk to residents in the area, particularly children. However both agree that the current traffic problems are a matter to be considered in the valuation. [19] In providing his valuation Mr Hocart has relied upon his experience in the area in respect of the potential impact of ocean views upon the market value of the land. He argues that where there are wide uninterrupted ocean views, then there tends to be a premium of about 50% included in the price paid for such lots. However, with the subject land, he argues that the more restricted views would not enhance the land value to that extent that would be evident on the uninterrupted ocean views from parcels on the eastern side of Woodgee Street. [20] Mr Duus advises that the subject land has always been used by his family as a holiday home, in keeping with the general residents in the area. He agreed that its proximity to the Currumbin Bird Sanctuary ensures a pleasant environment. The Method of Valuation – [21] In explaining his method of valuation Mr Crowley advises that he has valued the land on a site value approach, rather than taking a piecemeal approach to the land. Mr Crowley explains the mass appraisal system used by the Chief Executive, which has been undertaken almost annually since 1985. Mr Crowley advises that throughout the preceding year prior to the relevant date, which in this matter was 1 October 2001, he undertakes a monthly analyses of vacant lands. From that list of monthly sales he selects -- 5 of 16 -- 6 the more representative of the market, and fully inspects those selected sales, including interviewing the respective parties involved. [22] From those analysed sales he prepares a revaluation list of all of the properties in the area, comparing the newly generated computer figures. A representative sample of the total community lots is then tested to determine a level of confidence in the predicted values. Each of those parcels is valued at its highest and best potential use. In the case of the current Currumbin locality, such comparisons of the analysed sales, compared to their previous unimproved values, revealed an increased market movement of between 3.1 and 3.6 for the Woodgee Street locality. A conservative increased factor of 2.9 times was demonstrated for the adjoining Sub Market Area (SMA) along Pacific Parade, while a factor of 3.1 was adopted for Woodgee Street SMA. Those market increases are supported in the current sales supplied by Mr Crowley, which represents sales along the western side of Woodgee Street. Mr Crowley advises that values on the eastern side of Woodgee Street tend to be higher than those on the western side. [23] Mr Crowley further advises that the Mass Appraisal computer system has the flexibility to allow various factors, such as land use, zoning or street name, to be varied according to the sales evidence. He advises that there was no evidence that indicated that the previous relativities within the SMA had changed, and so the market increase of 3.1 was applied to the previous relativities, which had been developed over many years, in determining the new unimproved values. Mr Crowley confirms that the sales evidence in the other part of Currumbin Hill away from Woodgee Street had increased at a lesser rate than the Woodgee Street area. Relativity – [24] In seeking relativity with adjoining parcels, Mr Duus advises that the adjoining property to the south of the subject land (Lot 6) had been unsuccessfully marketed for sale at an asking price of $700,000. He notes that dwelling has similar aspects, views and slopes as the subject land, and had $300,000 spent on renovations prior to advertising for sale, (Exhibit 3). Mr Crowley rejects that comparison, as he notes that as the sale was not consummated, then the offer to sell provides no conclusive evidence. He also argues that the renovation costs of $300,000 might not reflect the true added value to Lot 6. [25] Mr Crowley also notes that Lot 6 is only half the frontage to Woodgee Street, and therefore has an inferior aspect to the street frontage as the subject land. Mr Duus accepts that Lot 6 has a narrower frontage, but argues that the ocean views are similar to the -- 6 of 16 -- 7 subject land, a matter questioned by Mr Crowley, who argues that the subject land has views down Murraba Street to the ocean. [26] Mr Crowley agrees that changes in relativity between parcels in Woodgee Street could change over time, but he argues that he has no evidence to support any changes in relativity. On that basis he has maintained the previous relativities between the subject land and adjoining lands. Comparison of Sales – Mr Hocart’s evidence - [27] Mr Hocart’s report initially provides four sales of vacant lands for comparison purposes. (Exhibit 4). His comments initially saw his Sale 4 at 12 James Street, Currumbin as the most relevant sale. However Mr Hocart later was granted leave to withdraw that sale, as he now understands that details of that sale were incorrect at the time. On that basis he now draws the following comparison:  Sale 1 – (772 Pacific Parade, Currumbin). This has an area of 433 m² and is an esplanade fronting vacant parcel with high quality direct ocean and beach views. The sale is seen as superior to the subject land, and sold in June 2001 for $750,000, and has an unimproved value of $655,000. [28]  Sale 2 – (768 Pacific Parade, Currumbin). This has an area of 431 m² and is an esplanade fronting vacant parcel with similar views as Sale 1. The sale is seen as superior to the subject land and sold in July 2001 for $750,000, and has an unimproved value of $680,000. [29]  Sale 3 – (72 Woodgee Street, Currumbin). This has an area of 589 m² and is a vacant lot with good water views. The sale is seen as superior and sold in April 2001 for $660,000, and has an unimproved value of $620,000. On the basis of those comparisons Mr Hocart assessed the subject land to have an unimproved value of $380,000, acknowledging its location on the western side of Woodgee Street, and its very limited views through trees, and a power installation. Mr Hocart accepts that the power installation refers to the water pumping station described in para [9]. [30] Mr Crowley challenges the direct comparability of both Sales 1 and 2, as he notes that those sales are much narrower parcels, and are adjoining the Elephant Rock Café and the Junior Surf Lifesaving Club on Pacific Parade. As such he argues Sales 1 and 2 are subject to heavier traffic and pedestrian flows than the subject land. Mr Duus concedes that there are public toilets near Sales 1 and 2, and that those sales are either side of the -- 7 of 16 -- 8 Elephant Rock Café. However he argues that any noise from live entertainment at either of those adjoining premises is partly controlled by double glazed windows on the upper level. However he further agrees that shops and offices, a telephone box, a bus stop and public waste disposal wheelie bins are also nearby in Pacific Parade. [31] Mr Crowley rejects Sales 1 and 2 as reasonable comparisons with the subject land, due to the different local environment of those two localities. He also argues that Sales 1 and 2 do not set a maximum level for values in that area, and he draws comparisons from the more comparable property slightly removed from Pacific Parade. Mr Hocart argues that nearness to the ocean with direct views of the water are the most important features desired in the market place. For that reason he sees the beachfront land and esplanade lands as the premium lots in the area. Although he believes that his Sales 1 and 2 were purchased for construction of units, he argues they represent the best evidence of value available. He argues that the purchase of higher use site for $750,000 indicates that the subject land should be valued less than at that level. Mr Crowley advises that both Sales 1 and 2 were purchased for, and have been developed as, single residence sites. Mr Hocart also advises that where there are good uninterrupted views of the water then, in his opinion, purchasers are prepared to pay a premium of about 50% above lands with lesser ocean views. In respect of his Sale 3 (72 Woodgee Street) Mr Hocart sees that as his most comparable sale to the subject land, but argues that Sale 3 is less steep than the subject land. Sale 3 also rises steadily from the road towards the rear. Mr Hocart estimates the relative steepness of Sale 3 (72 Woodgee Street) at about 25 degrees, and the subject land at about 40 degree slope. He argues that 72 Woodgee Street also has views of the ocean to the north, and is above road level. Mr Hocart also notes that due to the very steep nature of the subject land, the only usable portion for development is the front 405 m² of area. Mr Crowley’s evidence – [33] To support his valuation Mr Crowley supplies the following sales:  Sale 1 – (68 Woodgee Street – Lot 1 on C 33127). This is a 524 m² vacant parcel located about 140 metres north of the subject land. The sale has frontage to three streets, and is triangular in shape, with a base depth of only 19 metres. Both frontages to Kandra Avenue and Woodgee Street vary from steep to very steep, and access to the parcel is seen as inferior to the subject land. Overall the sale is seen as inferior to the subject land due to its shape, and also the more restricted ocean views through timber to the east. The sale sold in August 2001 for $500,000, was analysed at $499,000, and applied at $450,000. -- 8 of 16 -- 9 [34]  Sale 2 – (48 Woodgee Street – Lot 1 on RP 1979). This is a 405 m² improved parcel located 100 metres south-east of the subject land, and also on the south- western side of Woodgee Street. The sale is irregular in shape with a predominantly south-west aspect, and falling steeply from Woodgee Street to the rear of the parcel. An existing high set fibro cottage was seen as having an added value of $30,000, and has continued to be used after the sale. Overall the sale is seen as inferior to the subject land due to its narrower frontage, its irregular shape, and its more restricted views of the ocean. The sale sold in August 2001 for $487,500, was analysed at $457,500, and applied at $435,000. The sale previously sold in May 2000 for $330,000, and has been resold again at a higher price subsequent to the August 2001 sale. [35]  Sale 3 – (9 Murraba Street, Currumbin – Lot 3 on RP 47740). This is a 455 m² improved parcel with an old weatherboard and corrugated iron highset cottage, which is subsequently been demolished, and was seen to have an added value of $50,000 at the date of sale. The sale is located about 150 metres north of the subject land, on the north-eastern side of Murraba Street, and close to the ocean beach area. The sale is a narrow lot with a south-western aspect, and while currently it has ocean views across the roof of the adjoining building, those ocean views could later be obstructed by redevelopment of the adjoining building. Overall the sale is seen as inferior due to the lack of security of the ocean views. The sale sold in August 2001 for $650,000, was analysed at $600,000, and applied at $530,000. Mr Crowley has maintained the previous relativity between Sale 3 and the subject land. (transcript 107). The sale previously sold by the Public Trustee on behalf of a deceased estate in 2001 for $400,000. [36]  Sale 4 – (24 Duringan Street, Currumbin – Lot 2 on RP 104952). This is an 885 m² improved battleaxe rear parcel located about 350 metres north of the subject land. The old 1950s brick dwelling was seen to have no added value in the sale, and an allowance of $7,000 has been provided in the analysis of the sale for removal of the dwelling to obtain a vacant building site. However the old dwelling has continued to be occupied to the present time. The land rises steeply from the road to the rear of the sale, and is seen as inferior terrain to the subject land. The sale has superior views of the ocean to the north. Access to the land is good and the sale sold in August 2001 for $1,000,000, was analysed after allowing for demolition of the dwelling at $1,007,000, and applied at $924,000. The sale previously sold in 1996 for $440,000 on an apportionment basis with the adjoining lot between common vendors and purchasers. Overall the sale is seen as superior due to the superior ocean views. [37] Mr Duus is familiar with Sale 2 (48 Woodgee Street), and argues that parcel has direct ocean and beach views, and closer access to a large vehicle parking area in Woodgee Street, and is located on a less dangerous part of Woodgee Street compared to the subject land. Mr Crowley disagrees that ocean views are as good at Sale 1 (68 Woodgee Street) compared to the subject land, as he argues that while the ocean can be seen between trees on the northern side of Woodgee Street, those ocean views are more distant. (Exhibit 6, p -- 9 of 16 -- 10 13). There was also some disagreement about the effects of the western setting sun on Sale 2 and the subject land, but that added little to the direct comparisons provided. Mr Crowley also argues that because of the truncated irregular shape of the rear of Sale 2, the effective building area on Sale 2 would be less than on the subject land. [38] Mr Duus is also familiar with Sale 1 (68 Woodgee Street) which he advises was formerly church property and, in his opinion, that sale reflects the scarcity of vacant lands in Woodgee Street. He agrees that Sale 3 (9 Murraba Street) was likely to be enclosed by unit developments in the future, and there was some risk of the Sale 3 parcel losing its current ocean views. However he notes Sale 3 has easy access to the beach and shops, which are only 40 metres to the east. However he queries the reliability of Sale 3, noting the previous auction sale at $400,000 only three months earlier, and it may have been an in-house sale in August 2001. [39] In respect of Sale 4 (24 Duringan Street) Mr Duus notes that the views from that property extend right down the coast to Surfers Paradise and Burleigh, and the purchaser clearly paid $1,000,000 for those superior ocean views. He argues that Sale 2 (48 Woodgee Street) is the only sale that is anywhere near comparable to the subject land. Mr Duus also argues that Sale 4 (24 Duringan Street) has much easier walking access to the ocean than the subject land. [40] Mr Crowley notes that Sale 2 (48 Woodgee Street) has similar on-site parking restrictions as the subject land, due to the similar slopes of either parcel. However it is agreed that the footpath is narrower in front of the subject land than at Sale 2, and traffic therefore is nearer to the subject land. [41] Mr Crowley was aware of the general traffic problems in Woodgee Street, and notes that the dwellings along the south-western side of the street are all near to the front alignment, due to the steep nature of those lands to the south-west. Mr Crowley also advises that only his Sale 4 was a southern purchaser, and the other three sales were all to local buyers seeking to relocate on the Gold Coast. Decision: The Legal Principles – [42] Before considering the evidence I turn to the legislation and note that the unimproved value of land is provided for in s.3(1)(b) which relevantly states: “3.(1) For the purposes of this Act – ‘unimproved value’ of land means – -- 10 of 16 -- 11 (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.” [43] In Mr Crowley’s determination he has valued the subject land for the most advantageous purpose for which it could be adapted, or its highest and best use. It would appear that any new dwelling would need to be constructed 6 metres from the street alignment, but with modern construction methods a two-level dwelling above the level of the front alignment would be possible. The photographs of existing houses in Woodgee Street confirm that assumption. (Exhibit 3). The benefit to the value of the subject land would then be related to any ocean views that would be available from that second level. It is reasonable that such ocean views would be superior to those currently available from footpath level. [44] The guiding principles in respect of how the value of the land should be considered was established by the High Court of Australia in the matter of Spencer v The Commonwealth of Australia (1907) 5 CLR 418. In that matter Isaacs J noted at 441 that it was to be “for the most advantageous purpose for which it was adapted”, and was a value determined by a prudent buyer and a seller contractual agreement. Clearly the value of land is to be determined in full understanding of all the features and circumstances of the land, following negotiations between a well informed and prudent buyer and seller, who are both willing to trade but not anxious to do so. It would be unreasonable to conclude that either party would not be aware of the potential for extensive views from the subject land once a dwelling was later constructed on the site. That potential to maximise any ocean views would have been paramount in the mind of either vendor or purchaser of the subject land. Such potential views would have existed in the unimproved value of the land. The Nature of the Land – [45] The question then to be asked is whether the current filtered ocean views from the subject land through the several large pine trees in Murraba Street could be seen as superior to the ocean views across Woodgee Street from 48 Woodgee Street (Sale 2). From the joint site inspection I believe that the ocean views from Sale 2 are more likely to be partly obstructed by trees and vehicles to the north-east of Woodgee Street, rather than down the sloping corridor of Murraba Street. However neither property has unobstructed ocean views similar to those evident from Sale 4 (24 Duringan Street). The advantage for the -- 11 of 16 -- 12 subject land is that with a wider street frontage to Woodgee Street, there is more scope to maximise any ocean views available. [46] While Mr Hocart has considered the subject land as virtually equivalent to a 405 m² parcel, because of the steepness of the lot, I agree with Mr Crowley that the rear portion of the land has some value as open space within the development constraints imposed by Council. What is more relevant is that both valuers have considered the lot on a residential site basis. The most important features are the frontage to Woodgee Street, and the ocean views available from that aspect. The use of a site value approach was adopted in DF and M Ward v Valuer-General (1983) 9 QLCR 48, at 50; and also in Hans and Else Gran v Valuer-General (1992-93) 14 QLCR 327, at 330. [47] A key difference between the parties would appear to be the disadvantages inherent in the current curved road alignment of Woodgee Street. I agree with Mr Duus that the present safety aspects of speeding traffic along Woodgee Street, particularly from the north-west, is worse than at the alignment of Sale 2 (48 Woodgee Street). The evidence of accidents with road furniture demonstrates that point. While the intersection of Murraba and Woodgee Streets may provide a better corridor for ocean views from the subject land, it also adds to the traffic problems at the location of the subject land. There is clearly safer on street parking arrangements in front of Sale 2 (48 Woodgee Street). On balance, while Mr Crowley has made some allowance for those traffic problems, I believe he may have underestimated their impact upon the subject land in comparison to Sale 2 (48 Woodgee Street). [48] In respect of Mr Hocart’s opinion that uninterrupted ocean views tend to command a premium of about 50% over parcels with lesser views, I believe that would be demonstrated in part by Sale 4 (24 Duringan Street), where a price of $1,000,000 was paid for good ocean views. While such a broad principle must be considered in the light of the other specific features of comparable lots, the unimproved value of Sale 4 ($924,000) compared to Mr Crowley’s determination of $710,000 for the subject land, is reasonably consistent with that opinion. Also while there was no evidence of unimproved values on the north-eastern side of Woodgee Street, with uninterrupted ocean views, those parcels also seem to be well in excess of the value of the subject land. The Method of Valuation – [49] In respect of Mr Duus’ method of comparing average increases between different localities, I note that courts have not looked favourably upon such an approach. In the matter then of averaging rates based upon dissimilar properties, I note that process had -- 12 of 16 -- 13 been rejected by the courts. The matter of averaging of sales was addressed in Daandine Pastoral Company Pty Ltd v Commissioner of Land Tax (1943) 7 The Valuer 299 at 305, where Williams J said in the High Court of Australia on 26 August 1943: “This method of averaging to my mind is unsound. The prices obtained at comparable sales should not be aggregated and averaged, especially when the prices obtained on sales of small areas are dealt with in this way in order to obtain the value per acre of a large area. The only safe course is to compare each sale with the subject land separately..” That principle has been upheld by lesser courts on many occasions subsequently. [50] The method of valuation outlined by Mr Crowley has been examined by this Court many times. Indeed in respect of the appellant’s concerns with the current mass appraisal approach to valuations, I note that has been addressed by the courts. The process of mass appraisal of valuations using a large computer system has been the subject of considerable concerns since it was first introduced into Queensland in 1985. However, while there has been various appeals against the reliability of such a system, perhaps the clearest direction in that regard is to be found in the decision of the Land Appeal Court in BG and AK Wilson v Chief Executive, Department of Lands (1994-95) 15 QLCR 63. In that matter the Land Appeal Court considered similar evidence to that currently provided by Mr Crowley as to how he goes about his task of an annual valuation. The Land Appeal Court determined: “The process in our opinion does not offend the statute.” (p.71). [51] What Mr Crowley’s explanation provides is a broad overview of the general sub market areas around Woodgee Street. Clearly the wider sales evidence would indicate that the area along Pacific Parade was increasing at a slightly lesser rate than the Woodgee Street area. What that demonstrates is that care needs to be taken in directly comparing the Pacific Parade sales with the Woodgee Street sales. Mr Crowley has sought to avoid any problems in comparisons by using his sales along the higher ridge area of Woodgee Street. He acknowledges that his Sale 3 (9 Murraba Street) is more in the nature of a supporting sale rather than a basic sales evidence. Comparison of Sales – [52] In drawing comparisons with his sales evidence Mr Crowley has retained the original relativities of those parcels. In adopting sales of vacant or lightly improved parcels he has also followed a method of determining unimproved value long favoured by courts at all levels. That method is taken where there is no evidence of any scarcity inherent in any limited sales adopted. -- 13 of 16 -- 14 [53] That approach has been followed on many occasions, and was clearly supported in the matter of WM and TJ Fischer v Valuer-General (1983) 9 QLCR 44, where the Land Appeal Court said at 46: “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. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence.” That was also adopted by the Land Appeal Court in R and MM Barnwell v Valuer- General (1990-91) 13 QLCR 13, at 17; and also in PH Clough v Valuer-General (1981- 82) 8 QLCR 70, at 76. [54] The matter of scarcity was addressed in a recent decision of the High Court in Maurici v Chief Commissioner of State Revenue and Anor [2003] HCA 8, 13 February 2003. The matter of scarcity of comparable sales is an issue well known to experienced valuers. The circumstances of Maurici were different to the current matter in that matter in Maurici, it was agreed by the parties that a scarcity factor did exist in respect of the three sales of vacant land that had been adopted by the Valuer for the Chief Commissioner. Under those circumstances there had been also a representative group of comparable improved sales which were not considered by the Government Valuer. The High Court directed that under those circumstances the valuer should have considered the other sales of improved land. [55] That issue was also recently clarified by the Land Appeal Court in Chief Executive, Department of Natural Resources and Mines v GE and JEJ Spender [2003] QLAC 0086, 19 December 2003, to be reported. That decision was the first interpretation by the Land Appeal Court in Queensland on the implementation of Maurici on that issue, and provides a comprehensive explanation on the matter of scarcity of sales. However in the current matter Maurici can be distinguished as there is no evidence that scarcity exists in the available sales for comparison purposes. Mr Crowley has also used improved sales in his analyses. [56] If I look then at the overall comparisons, I accept Mr Hocart’s advice that nearness to the ocean beaches, and the presence of wide ocean views are very important features widely sought after on the Gold Coast. However I also agree with Mr Crowley that it is too simplistic a conclusion to accept that Sales 1 and 2 on Pacific Parade would establish an upper limit for unimproved land values in the Currumbin area. While both 768 and 772 Pacific Parade have the features of ocean and beach views and are esplanade parcels, they also suffer from increased noise, lack of privacy and heavier passing traffic flows. While -- 14 of 16 -- 15 768 and 772 Pacific Parade are easier lands for development, they also have a smaller road frontage than the subject land. As both 768 and 772 Pacific Parade were developed as single unit dwellings, I believe that direct comparisons are useful if all features are considered. On balance I believe those two esplanade sales are comparable to the subject land. [57] If I turn then to Mr Crowley’s Sale 3 (9 Murraba Street), I find that the applied value of that parcel at $530,000 would reflect reasonable relativity with both 762 Pacific Parade ($680,000) and 772 Pacific Parade ($655,000). While Sale 3 (9 Murraba Street) has less intrusive noise, privacy and traffic impacts, it has more risks with any loss of ocean views occurring through adjoining developments. While Sale 3 has a more easy terrain for development, compared to the steep subject land, the risk to its ocean views is greater than the risk to ocean views from the subject land along the alignment of Murraba Street. On that basis I see Sale 3 (9 Murraba Street) as inferior to the subject land. [58] Moving away then from the Pacific Parade area, if I compare Mr Hocart’s Sale 3 (72 Woodgee Street) I find that its terrain is easier than the subject land, but its frontage, and therefore the ability to maximise any ocean views, is less than the subject land. That parcel is also nearer to Duringan Street which is the ocean esplanade traffic route leading to Pacific Parade. Sale 3 (72 Woodgee Street) would also suffer from rat-running along Woodgee Street similar to the subject land. On balance I believe 72 Woodgee Street ($620,000) is a comparable sale, but allowances must be made for the difference in area and width of the subject land, and it is slightly inferior to the subject land. [59] In respect of Mr Crowley’s Sale 4 (24 Duringan Street) I agree with both valuers that it is a vastly superior property, with very good ocean views, easier terrain and better privacy and less traffic noise than the subject land. The applied value of $924,000 reflects those features. [60] The two remaining sales of Mr Crowley at 68 Woodgee Street ($450,000) and 48 Woodgee Street ($435,000) reflects similar traffic along Woodgee Street, although the potential for traffic accidents at the subject land I believe is greater than at either of those two sales as discussed previously in para [47]. I agree with Mr Crowley that the more restrictive shape of the lot at 68 Woodgee Street, and its more filtered ocean views, demonstrates that parcel to be inferior to the subject land. [61] The remaining sale is then at 48 Woodgee Street, which is the nearest sale in location, aspect, terrain and traffic impacts. However 48 Woodgee Street has an inferior shape and frontage, and as outlined in para [45] its ocean views I believe are more constrained than those from the subject land. I also accept that the curved alignment of Woodgee Street at -- 15 of 16 -- 16 the subject land is more at risk than at 48 Woodgee Street. The subject land is superior to 48 Woodgee Street. [62] On balance then the unimproved value of the subject land is constrained by the following key comparisons: Sale Unimproved Value Comparison 768 Pacific Parade $680,000 Comparable 772 Pacific Parade $655,000 Comparable 72 Woodgee Street $620,000 Slightly inferior 9 Murraba Street $530,000 Inferior 68 Woodgee Street $450,000 Inferior 48 Woodgee Street $435,000 Inferior [63] In considering Mr Crowley’s assessment of the subject land at $710,000, I believe he has allowed adequately for the physical nature of the parcel, and also for its effect of ocean views, as well as the general overall nature of traffic problems along Woodgee Street. However on the evidence, I believe that the history of problems and communications between the appellant and the Council about traffic problems at the intersection of Woodgee Street and Murraba Street, is more complicated than previously known by Mr Crowley. On that basis I will allow a further $25,000 reduction in the unimproved value of the subject land to $685,000. Conclusion: [64] In concluding this matter on the evidence I believe that the appellant has partly demonstrated his case. The valuation of the Chief Executive is set aside, and the unimproved value of Lots 4 and 5 on RP 1978 is determined in the sum of Six Hundred and Eighty-Five Thousand Dollars ($685,000). NG DIVETT MEMBER OF THE LAND COURT -- 16 of 16 --