Beckingham & Anor v Department of Natural Resources, Mines and Energy [2004] QLC 18

LAND COURT OF QUEENSLAND CITATION: Elsa Beckingham & Anor v Department of Natural Resources, Mines and Energy [2004] QLC 18 PARTIES: Elsa Y and Ralph Beckingham (applicants) v. Chief Executive, Department of Natural Resources, Mines and Energy (respondent) FILE NO: AV2002/0399 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 24 March 2004 DELIVERED AT: Brisbane HEARD AT: Coolangatta MEMBER Dr NG Divett ORDER: The appeal is upheld, the unimproved value of the Chief Executive is set aside, and the unimproved value of Lot 50 on C 33118 is determined in the sum of One Hundred and Eighty-One Thousand Dollars ($181,000). CATCHWORDS: Valuation – Method of Valuation – Use of sales. Statutory valuation – Valuation of Land Act 1944 – Relativity. Valuation – Factors in valuation – Access – Decreased access – Impact upon valuation – Accepted as existing access. APPEARANCES: Mr R Beckingham for the appellants Mr GJ Smith for the respondent -- 1 of 11 -- 2 Background: [1] This matter deals with land at 34 Bilinga Street, Currumbin, and described as Lot 50 on C 33118, Parish of Tallebudgera. The subject land has an area of 1,017 m² and is located to the east of the Gold Coast Highway, and is about 16 kilometres south of the Gold Coast Mail Centre, about 700 metres by road to the ocean frontage, and about 1.1 kilometres to the nearest patrol surfing area. The subject land fronts a sealed bitumen carriageway with earth shoulders, which passes through the adjoining public reserve which is vested in the Queensland Department of Parks and Wildlife as part of the adjoining Currumbin Bird Sanctuary explained later. Electricity reticulated town water, telephone and mail utility services are available, and the subject land is zoned Residential Dwelling House 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, relativity, changes in the value and comparison of sales. [2] On 25 February 2002 the Chief Executive issued a valuation of the subject land at $197,500. Following an objection the Chief Executive confirmed that figure on 25 June 2002. The appellants have now appealed claiming the unimproved value should properly be $80,000. At the hearing on 11 September 2003 the appellants were granted leave to amend that figure to $96,000, which is the amount now appealed for. [3] Ralph Beckingham appeared and gave evidence for the appellants. Mr GJ Smith, Senior Legal Officer appeared for the respondent, calling evidence from Gregory Patrick Crowley, the departmental senior registered valuer responsible for determining the valuation. History of the Land – [4] Mr Crowley provides details of the history of the development and subdivision of the subject land, and the surrounding parcels and roadways. Mr Crowley advises that from a search of the departmental file on the “Reserve” lands in question, he had found that the original plan of survey (C33118), was subdivided in 1921 (Exhibit 3 – Annexure 11). In 1923 certain parts of that subdivision including original Lots 77, 78, 11 – 15, and 1 – 4, plus parts of the original road reserve area were amalgamated into a “Scenic Reserve” lot, which has subsequently become Lot 299 on WD 4480. Lot 10 as it then was, was renumbered Lot 50 on C 33118, and is now the subject parcel. [5] The “Reserve” file records reveal that throughout repeated discussions during the 1930s, 1950s and 1960s, it had always been resolved that the old roadway passing across the -- 2 of 11 -- 3 “scenic reserve”, and now the location of the privately constructed bitumen access to the subject land (Lot 50), and the adjoining parcel (Lot 11), should continue to provide access to the two parcels. While there is no actual registered title, the “scenic reserve” was vested in the Department of National Parks and Wildlife in 1998, and continues to the presence as a reserve for the Currumbin Bird Sanctuary. [6] By virtue of that history of the land tenures, Mr Crowley concludes that the existing physical access is seen to be a legal “deemed access” by virtue of its continued use for that purpose. He argues that would also support why the owner of the adjoining Lot 11 on C 33170 (Mr Neuman), who is an experienced road construction civil engineer, was able to construct the current bitumen sealing of the road pavement, albeit at his own personal expense. The ongoing maintenance of the “roadway” has also been the responsibility of the two owners since 1971. Mr Crowley agrees that any possible contemplation to close that access track would inevitably lead to considerations of potential compensation to the two property owners affected. As such Mr Crowley sees the current access as an ongoing positive benefit to the subject land, but agrees it is the only physical access to the subject land. Nature of the Land – [7] Mr Beckingham notes that the departmental records reveal that the subject land was described as 35 Murraba Street, while it really should be corrected to be shown as 34 Bilinga Street. Mr Crowley concedes that administrative error, but argues that would not affect his valuation of the land, as he had personally visited the site, and also referred to longstanding departmental records of the property. Mr Beckingham argues that areas closer to the ocean beach are more highly sought after than lands further removed. [8] He notes that as the appellants must pass down the private access track to Bilinga Street, and then along Tomewin Street to the beach areas, the subject locality would be correlated more with those localities rather than the direct approaches to the beach along Murraba and Woodgee Streets. Mr Crowley concedes that under certain circumstances administrative boundaries can have an impact upon the public’s perception of property values. He also agrees that Murraba Street, Woodgee Street and Pacific Parade may be seen as more prestigious areas than the lands further removed from the beach. But he argues that he has adequately allowed for those differences in his valuation. [9] In respect of the impact of noise from passing traffic along the Gold Coast Highway, Mr Beckingham argues those levels are significant at the subject land, and extend for 24 hours each day. Mr Crowley agrees with that impact by vehicular noise, but argues that -- 3 of 11 -- 4 the impact of the visitor parking area near the chocolate factory outlet of the Currumbin Bird Sanctuary, a parcel at 11 Bilinga Street, although only during normal business hours, has a more visual impact upon the privacy of that parcel. Accordingly he has made greater allowance in the relativity of those two parcels because of the greater intrusion into the privacy aspects of the land. Mr Crowley notes that the subject land, by virtue of its relative isolation among the heavy vegetation of the Bird Sanctuary, is afforded increased privacy over surrounding areas. [10] Another key issue for the appellants is the lack of direct physical vehicular access eastwards towards Murraba Street, due to the very steep nature of the topography. Mr Crowley agrees that a steep gully prevents access from that direction, and concedes that he had not been aware of that restriction when he first prepared the valuation. He advises that he first became aware of that matter at the objection conference. However he had made no further allowance for that disability, as he believes that restriction would have been known to the Chief Executive from past valuations, and had therefore been included in the old relativity with adjoining parcels, and now continued in the current valuation. [11] In respect of the shape and slope of the subject land, there is agreement that the land falls steeply towards the south-west to the rear of the parcel. It is also agreed that there are only “heavily filtered views” towards the ocean to the south-east through the protected vegetation of the surrounding fauna reserve. Mr Beckingham also advises that the subject land is directly under the approach flight path for major commercial aircraft into Coolangatta Airport. As a consequence of that overhead traffic any noise levels are also maximised at the location of the subject land, rather than at the more easterly sales in adjoining Murraba and Woodgee Streets. Mr Crowley does not disagree that the remoteness of the subject land, and the adjoining Lot 11, also require that rubbish collection and postal services extend only to the public roadway in Bilinga Street, about 200 to 300 metres from the subject land. Changes in the Valuation – [12] Mr Beckingham argues that in applying the recent increase of 200% to the subject land, Mr Crowley, in his opinion, has unfairly treated the location of the subject land as similar to the adjoining easterly lands in Murraba and Woodgee Streets which adjoins the ocean beach areas. Mr Beckingham argues that it is not appropriate, particularly as he notes that comparable lands similarly removed from the beach at Bilinga Street and Tomewin Street have only been increased by 50% at the last valuation. Based upon a 50% increase from its former unimproved value, Mr Beckingham estimates the subject land at $96,000. -- 4 of 11 -- 5 [13] Mr Crowley rejects such an approach, advising that any concluded increase in value is really a result of the overall comparisons made with comparable sales in the locality, and percentage changes are not an appropriate method of determining the unimproved value of a parcel. However he concedes that the current method of mass appraisals might appear to be merely based upon such a simplistic assumption. Mr Crowley also agrees that an analysis of market forces at the relevant date, disclose a very clear preference for near beach properties, with large increases in the valuations in those localities. Relativity – [14] To support his estimate of $96,000 for the subject land, Mr Beckingham provides a schedule of relativities with surrounding parcels which were obtained from the records of the Department (Exhibit 2). He argues that schedule supports his conclusion of a percentage increase of 50% for areas similar to the subject land. The following sites were particularly relevant: Parcel Area Old New Change Valuation Valuation 11 Bilinga Street 496 m² $78,000 $117,000 50% 37 Bilinga Street 8,287 m² $2,300,000 $2,800,000 21.7% (hospital) 649 Gold Coast 637 m² $45.000 $54,000 20% Highway (adjacent Lot 11) Subject land 1,017 m² $64,000 $197,500 208.6% [15] Mr Crowley advises that the information provided to Mr Beckingham in respect of the 649 Gold Coast Highway site had subsequently been found to be incorrect, and the unimproved value of 649 Gold Coast Highway was now corrected to $170,000. Mr Crowley also rejects any comparisons with 37 Bilinga Street (the hospital), which is an entirely different land use and has no relevance to the residential use of the subject land. In respect of relativity with 11 Bilinga Street, Mr Crowley advises that smaller increase reflects the noise and lack of privacy impacts discussed at paragraph [9]. Mr Crowley also argues that 11 Bilinga Street is an inferior lot in respect of elevation and views, and that Tomewin Street area is a different environment to the subject land. [16] In seeking relativity in the general locality, Mr Crowley notes that his Sale 3 at 23 Albany Avenue also sold in April 1991 for $80,000, while the land adjoining the subject land at Lot 11 on C 33170 previously sold by auction about the same time in January 1991 for -- 5 of 11 -- 6 $93,000. He argues that provides some level of relativity between Sale 3 and that parcel at the current time. However Mr Beckingham advises that when Lot 11 sold for $93,000, that had been as an improved property, which was subsequently occupied for several years. Mr Crowley agrees that the sale price would have included an added value of about $10,000 for the older dwelling at that time. While Mr Crowley accepts that the fairly unique environment of both Lot 11 and the subject land provides some difficulties in drawing direct comparisons with the sales, he feels that the variations in unimproved values provided reflect a fair representation of those differences. Comparison of Sales – [17] Mr Beckingham provides no sales evidence of his own, while Mr Crowley provides the following sales:  Sale 1 – (68 Woodgee Street, Currumbin – Lot 1 on C 33127). This is a 524 m² vacant parcel located about 180 metres north of the subject land. The sale is a narrow triangular corner parcel in a locally well known address and closer to the beach. All utility services are available, and there is access to a superior unsealed to sealed section of Kandra Avenue and Woodgee Street. The maximum depth is 19 metres, and the land falls steeply to the east. There are filtered ocean views through vegetation. Overall the sale is in a superior location with less restricted views. The sale sold in August 2001 for $500,000, was analysed at $499,000, and applied as a single residence site at $450,000. [18]  Sale 2 – (48 Woodgee Street, Currumbin – Lot 1 on RP 1979). This is a 405 m² lightly improved sale with an old fibro cottage of added value $30,000. The sale is located about 200 metres east of the subject land, and has an inferior elongated shape, but with superior views. The sale is in a superior location closer to the beach. The sale overall is seen as superior due to its location and views. The sale sold in August 2001 for $487,500, was analysed at $457,500, and applied as a single residence site at $435,000. The sale sold previously in May 2000 for $330,000. [19]  Sale 3 – (23 Albany Avenue, Currumbin – Lot 165 on RP 93664). This is a 526 m² vacant parcel located about 500 metres west of the subject land, and to the west of the Gold Coast Highway. The sale fronts Albany Avenue to the west and Albany Lane to the east, and falls steeply towards the west. There are views towards the west. The sale sold in January 2002 for $162,500, was analysed at $160,500, and applied at $150,000. Overall the sale is inferior due to location and the nature of the land. The sale last sold in April 1991 for $80,000. [20] Mr Crowley explains that while the zoning of Sales 1 and 2 would allow for duplex developments, the evidence of those sales reveals that they were purchased for, and have a highest and best use as, single residence sites. In drawing comparisons Mr Crowley -- 6 of 11 -- 7 acknowledges the very unique nature of the subject land, but argues that location east of the highway is a significant factor for consideration. Mr Crowley advises that while Woodgee Street is a superior area, that street is also a well known rat running access road for traffic, and it also has no street parking because of its narrow nature. Decision: The Nature of the Land – [21] If I turn first to Mr Crowley’s assumption that the existing bitumen sealed access to the subject land, through the adjoining reserve for the Currumbin Bird Sanctuary, may be “deemed” to constitute some legal recognition of a right to use that land by the appellants. As such he has valued the land as having reasonable physical access. I understand the meaning of “deemed” to be taken as to believe, consider, or judge. (Concise Oxford Dictionary, 7th edition 1982). [22] That understanding was also followed by the High Court in Hunter Douglas Australia Pty Ltd v Perma Blinds [1969-1970] 122 CLR 49, where Windeyer J said at 65: “This passage has been often quoted in Australian courts. It is a recognition that the verb “deem”, or derivatives of it, can be used in statutory definitions to extend the denotation of the defined term to things it would not in ordinary parlance denote. This is often a convenient device for reducing the verbiage of an enactment. But that the word can be used in that way and for that purpose does not mean that whenever it is used it has that effect. After all, to deem means simply to judge or reach a conclusion about something. A judge, or a juryman, is a deemster, although, except in the Isle of Man, that name has long been archaic. The words “deem” and “deemed” when used in a statute thus simply state the effect or meaning which some matter or thing has – the way in which it is to be adjudged. This need not import artificiality or fiction. It may be simply the statement of an indisputable conclusion …” While Windeyer J was considering the implications of a deeming provision in legislation in that matter, and its effect in creating a statutory fiction, his conclusion was that the words “deeming” referred to the way in which a matter is to be judged. [23] The matter of a “deemed” refusal in a town planning matter was also considered in Grace Brothers Pty Ltd v Willoughby Municipal Council & Ors (1979-81) 44 LGRA 400. In that matter Wootten J noted at 410: “The word “deemed” may be used in various ways; one of them is to create a statutory fiction: Hunter Douglas Australia Pty Ltd v. Perma Blinds (1971) 22 C.L.R. 49, at p. 65. It is so used in the present case, as there is no actual refusal of the application. As Griffith C.J. said in Muller v. Dalgety & Co. Ltd (1909) 9 C.L.R. 693, at p. 696: ‘When used in that sense it becomes very important to consider the purpose for which the statutory fiction is created.’” -- 7 of 11 -- 8 [24] In the current matter the history of the subdivision in paragraph [4] reveals that the original physical access to the subject land was seen to include the old road reserve on survey plan C 33118, passing south to Bilinga Street. Bearing in mind the physical impracticality of access to Murraba Street to the east, I would agree with Mr Crowley that the current privately constructed bitumen access along the route of that old road reserve, can be seen as a “deemed access” in terms of an annual valuation process. [25] In respect of whether such “deemed access” should be seen to have any special adverse impact upon an annual valuation, I turn to the matter of Chief Executive, Department of Natural Resources v Body Corporate for Golden Sands Community Title (AV99-280), 15 December 2000, unreported. In that matter the Land Appeal Court considered whether any allowance should be made in a valuation of an existing 17 storey older building site, where town planning restrictions now limited the height of any replacement building to only three storeys. The Land Appeal Court said at 6: “It is our view that the statutory provision contemplates a valuation based not on some refined view as to the use of the land, but on its use “for any purpose for which it was being used”; that is, in the present case, for the use of units or apartments for residential purposes. The use of the broad word “purpose” does not in our view invite an inquiry as to whether the manner and quality of the use for that purpose in the case of “Golden Sands” differs from the manner and quality of use in the case of a more modern structure. … That is, the provision is concerned not with a different manner or quality of use emerging in the event of a new building being constructed, but with a continuation of the type of use previously carried out on the land.” [26] The analogy in the current matter is that the existing “deemed access” is to be valued as it exists for the subject land. If, in the future, that “deemed access” were to be changed, then any impact upon the value of the subject land would be a matter for consideration at that future time. [27] If I turn then to the location of the subject land, I note Mr Crowley’s concession that the site and its single neighbour Lot 11 are quite unique in that area. I believe he has allowed for the special difficulties with rubbish and postal services, and also for any aircraft noise exposure, which I believe would not be too dissimilar at the sale sites to the east in Woodgee Street. I also accept that the physical location of the subject land would have a closer correlation with the lands in Bilinga Street and Tomewin Street, rather than with the direct access to the beach from Woodgee Street and Murraba Street. Mr Crowley has acknowledged there is a difference in locality, but the question is whether he has allowed sufficiently for those differences in his valuation at $197,500. Mr Beckingham also -- 8 of 11 -- 9 agrees that the special privacy afforded the subject land by virtue of its surrounding Currumbin Bird Sanctuary land, is an asset that must be considered. Changes in the Valuation – [28] In considering the relative changes in the value of the subject land, compared to surrounding parcels, Mr Beckingham is really seeking comparisons on a relativity basis. The matter of percentage increases in value is often used by appellants as a test of the reliability of the unimproved value of their land. But percentage changes are in themselves not a reliable measure of the liability of the method of valuation. The matter of percentage increases in value was considered by the Full Court of Queensland in CH and BD Henricks v The Valuer-General (1983) 9 QLCR 59, where Macrossan J (later CJ) noted at 63 that there could be many reasons why parcels of land can increase at different rates over a period of time. [29] The real test is not the percentage increase in the unimproved values, but a comparison of the subject land with sales of comparable sites in the vicinity of the subject land at the time of the valuation. When making such comparisons the Land Court Appeal noted in WM and TJ Fischer v Valuer-General (1983) 9 QLCR 44, 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.” Comparison of Sales – [30] In drawing comparisons the only sales evidence is supplied by Mr Crowley as follows: Sale Area Applied Value Comparison 1 (68 Woodgate 524 m² $450,000 Superior location and Street views 2 (48 Woodgate 405 m² $435,000 Superior location and Street view 3 (23 Albany 526 m² $150,000 Inferior location and Avenue nature Subject Land 1,017 m² $197,500 - [31] If I look first at the relative size of those parcels I find that the subject land is about twice the size of any of the sales. However I note that while some additional value was likely to attach for that extra area, residential parcels are in fact valued on a site basis, and not a -- 9 of 11 -- 10 per square metre. That was clarified by the Land Appeal Court in Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327, where it said at 330: “The appellants fail on this point because the appropriate basis for the valuation of a residential lot is not the application of a rate per square metre but an assessment of the unimproved value of each lot as land used for single unit residential purposes. As the Land Appeal Court said in its decision on the appellants’ previous appeal (H and E Grahn v. The Valuer-General, AV89-246 and 247, 13 December 1990): ‘for the purpose of valuing residential sites, the preferable method of comparison is on a site to site basis and not on the basis of a unit area valued comparison. Site for site comparison should take into comparison such matters as the size of the lots, the situation of and access to the lots, the shape and topography of the lots etc. and comparisons on a unit area basis do not necessarily reflect valuation considerations for the above features.’” Relativity – [32] While the above comparisons appear to support Mr Crowley’s conclusions, I note that he has also provided a relativity check between Sale 3 (23 Albany Avenue) and Lot 11 (the adjoining Lot to the subject land). By Mr Crowley’s evidence those two parcels last sold about the same time in 1991 for $80,000 (23 Albany Avenue) and $93,000 (Lot 11). After allowing for Mr Crowley’s estimate of $10,000 as the added value of the old dwelling on Lot 11 at that time, the land component of Lot 11 at that time was $83,000. That provides a relativity check of 1.0375 for Lot 11. [33] If I accept the same relativity between Sale 3 which is now applied at $150,000, I could conclude an applied value of $155,625 for Lot 11. Now I note that Mr Crowley has maintained the old relativity between Lot 11 at $170,000 and the subject land at $197,500 at 1.1618. If I then apply that old relativity to Lot 11, I could conclude a value for the subject land at $180,800 (say $181,000). [34] Now while that level of value is something less than Mr Crowley’s estimate of the current unimproved values of Lot 11 and the subject land, the same logic has been applied to his comparisons with Sale 3. I note also that Mr Crowley agrees that those two parcels are unique in their location, and the difference to Sales 1 and 2 are a matter of judging the considerable difference between the two locations relative to beach areas. [35] I accept that it is the responsibility of appellants to prove their appeal under s.45(4) of the Act, and that s.33 of the Act provides for maintenance of the current Chief Executive’s valuations, unless some wrong principle or error has been made. I believe the difference created by the added value of improvements on Lot 11 in 1991 justifies acceptance of an -- 10 of 11 -- 11 amended unimproved value for the subject land, and I will accept an unimproved value of $181,000. Conclusion: [36] Having considered the whole of the evidence I am persuaded that the appellants have partly proved their case. The appeal is upheld, the unimproved value of the Chief Executive is set aside, and the unimproved value of Lot 50 on C 33118 is determined in the sum of One Hundred and Eighty-One Thousand Dollars ($181,000). NG DIVETT MEMBER OF THE LAND COURT -- 11 of 11 --