Bray v Department of Natural Resources and Mines [2003] QLC 38

LAND COURT OF QUEENSLAND CITATION: Bray v Department of Natural Resources and Mines [2003] QLC 38 PARTIES: Peter W Bray (applicant) v. Chief Executive, Department of Natural Resources and Mines (respondent) FILE NO: AV2002/0190 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 28 May 2003 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER Mrs CAC MacDONALD ORDERS: (i) The appeal is dismissed. (ii) The unimproved value of Lot 2 on RP 58441, Parish of Toombul, County of Stanley, as at 1 October 2001, as determined by the Chief Executive in the sum of Six Hundred and Thirty Thousand Dollars ($630,000) is confirmed. APPEARANCES: Mr PW Bray, the applicant, in person Ms R Trigge, senior legal officer, Department of Natural Resources and Mines for the respondent [1] The appellant has appealed against the respondent’s annual valuation of his property as at 1 October 2001, at $630,000. The appellant contends for a value of $550,000. He submitted that the property had not increased in value since 1 October 2000 when it had been valued at $550,000. -- 1 of 8 -- 2 [2] The land, which is located at 57 Markwell Street, Hamilton, is described as Lot 2 on RP 58441, Parish of Toombul, County of Stanley, and has an area of 814 m². Hamilton is a prestigious inner suburb of Brisbane. Markwell Street is a bitumen sealed residential street with concrete kerbing and channelling. All services are connected to the site. [3] The subject land is improved with a substantial residence, a swimming pool and gardens. Mr Bray purchased the property in late 1978 and has lived there with his family since then. The respondent’s valuer described the land as a well elevated, irregular shaped allotment on the south-eastern slopes of Hamilton Hill with sweeping views from the west towards the south-west. The extent of the views and the degree to which new development in the vicinity may impact on those views are issues which will be discussed later in this decision. [4] The land is 14.71 metres wide at its northern boundary (the frontage to Markwell Street) and 24.29 metres wide across the rear boundary with an average depth of 42.4 metres. The frontage to Markwell Street is comparatively narrow and allows a single and double gate and a letterbox. [5] The land falls about 10 metres from the front north-western corner of the block to the rear south-eastern corner, a distance of approximately 45 metres. It has been extensively cut and filled to site the house and pool. [6] The land is designated Character Residential Area and is within a Demolition Control Precinct under the Brisbane City Plan 2000. [7] The appellant’s Grounds of Appeal are: The valuation of $630,000 is excessive because it does not make sufficient allowance for the combined effect of – 1. the slope of the land 2. the narrow frontage to Markwell Street; and/or 3. the continuing loss of views of the Brisbane River from the land. [8] At the hearing of the appeal, the appellant, Mr P Bray, who is a solicitor, appeared and gave evidence in support of his appeal. The respondent was represented by Ms R Trigge, a senior legal officer employed by the Department of Natural Resources and Mines. Ms J Manners, a registered valuer employed by the same department, gave evidence on behalf of the respondent. [9] The respondent is required by s.13 of the Valuation of Land Act 1944 (the Act) to determine the unimproved value of the subject land. Section 3 of the Act provides, in part that: “3.(1) For the purposes of this Act – -- 2 of 8 -- 3 ‘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.” [10] The subject land is improved land and therefore the valuation is to be made under s.3(1)(b). The highest and best use of the land is for single use residential purposes. [11] To determine the value of the land at the relevant date, the principles laid down in Spencer v The Commonwealth of Australia (1907) 5 CLR 418 are to be applied. For example, Isaacs J said at 441: “To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.” [12] The best evidence of unimproved value is market evidence. The Land Appeal Court said in PH Clough v Valuer-General (1981-82) 8 QLCR 70 at 76: “It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value.” [13] The respondent’s valuer relied on the sales of 4 properties in support of the valuation. The appellant produced no sales evidence. He said that he was familiar with the site, both its strengths and its weaknesses because he and his family have occupied the property since its purchase in December 1978. [14] Sale No. 1 is a 515 m² property at 81 Markwell Street, Hamilton, which sold on 23 January 2001 for $550,000. The land is within a Character Residential Area and a -- 3 of 8 -- 4 Demolition Control Precinct under the Brisbane City Plan 2000. At the time of sale, the land was unimproved except for clearing, fencing and retaining which Ms Manners valued at $10,000. She therefore analysed the sale to $540,000 and applied an unimproved value of $510,000. [15] Ms Manners described the sale property as a regular shaped allotment in a constricted cul- de-sac section of Markwell Street with frontage onto a narrow pedestrian pathway. The site is elevated with east to south-easterly views to the Brisbane River. Ms Manners said that the views of the river to the east could be lost if a multi-storey dwelling were constructed on the southern corner of Markwell Street and Whyenbah Street. A number of large new residences have been constructed in the vicinity of the sale property giving rise to a cramped impression in that section of Markwell Street. [16] Ms Manners said that the subject land is less than 100 metres north of the sale. The subject is considerably higher in elevation with views from the east towards the south- west encompassing the southern reaches of the Brisbane River, the Gateway Bridge and possible views of buildings on the edge of the City. Some of these views may be lost if properties along the eastern boundary of the subject were redeveloped with multi-storey buildings. Ms Manners said that the elevation of the subject land and the nature of the adjoining residential development create a greater sense of space about the subject land. [17] Overall, Ms Manners considered the subject to be a superior property because of its larger area, higher elevation, extensive views and less crowded locality. [18] Sale No. 2: This property is situated at 13 Quarry Street Hamilton, but adjoins Sale No. 1 on the latter’s western boundary. The area of the sale property is 520 m². It was sold for $604,000 on 13 July 2001. At the time of sale, the property was unimproved except for clearing, fencing and retaining which Ms Manners valued at $10,000. She therefore analysed the sale to $594,000 and applied an unimproved value of $550,000. [19] Ms Manners described the sale property as a regular shaped allotment. Quarry Street is a dead-end street running off Kingsford Smith Drive. That road is divided by a median strip, so that access to and from Quarry Street can only be obtained by traffic travelling west along Kingsford Smith Drive. Half of the frontage of the sale property is bounded by a pedestrian pathway linking Quarry Street with Markwell Avenue. The result is that only half the sale property has a street frontage to Quarry Street. [20] The sale is elevated with views of the river to the south and south-west. At the time of the sale, views to the City were obscured by trees on a Brisbane City Council reserve opposite, but some of the trees have subsequently been cut down revealing quite expansive views of the City. The land falls about 8 metres from the highest point at the -- 4 of 8 -- 5 north-west corner to the lowest at the south-east corner, a distance of approximately 30 metres. The property is exposed to considerable traffic noise from Kingsford Smith Drive. [21] Many of the comments made by Ms Manners in comparing the subject to Sale No. 1 apply equally to a comparison with Sale 2, and need not be repeated here. Points of difference are that the subject is approximately 55% larger than the sale. Both properties have limited street frontage. Ms Manners said that the subject is situated in a quieter residential location and enjoys easier access and greater privacy. There was no evidence as to whether the views from the sale could be obstructed by new development, but that seems unlikely because the land opposite the sale is a Brisbane City Council reserve. [22] Overall, Ms Manners considered the subject to be superior because of its larger area, higher elevation, extensive views and quiet residential location. [23] Sale No. 3 is an 809 m² property situated at 6 Dickson Terrace, Hamilton. It is designated Low Density Residential in the Brisbane City Plan 2000 and is within a Demolition Control Precinct. It sold on 19 March 2001 for $1,540,000. At the time of sale, the property was unimproved other than for site works, clearing, fencing and retaining which Ms Manners valued at $200,000. She therefore analysed the sale price to $1,340,000 and applied an unimproved value of $1,200,000. [24] The subject and sale properties are of similar size with steeply sloping topography. The difference in value between this sale, sales Nos. 1 and 2 and the subject was not completely explained but seems to have resulted from the panoramic views of the river and the City enjoyed by this sale. The sale also has the benefit of two street access. In view of the significant difference in the valuations of this sale and the subject, I do not consider that the sale is a useful comparison. [25] Sale No. 4: This property is situated at 49 Windermere Road, Hamilton. It has an area of 632 m² and is designated Low Density Residential Area in the Brisbane City Plan 2000. It is also within a Demolition Control Precinct. The property sold on 20 November 2001 for $635,000. At the time of sale, the property was unimproved other than by clearing, fencing, levelling and retaining which Ms Manners valued at $15,000. She therefore analysed the sale to $620,000 and applied it to reach an unimproved value of $560,000. Ms Manners described the sale as a support sale. [26] Although the sale property is only 300 metres north of the subject, it is considerably lower in elevation than the subject and therefore does not enjoy the views which benefit the subject. The sale is located on the corner of Windermere Road, which carries a large volume of traffic, and Eldernell Terrace which also carries some through traffic. The -- 5 of 8 -- 6 subject is about 30% larger than the sale and has steeper topography and a reduced street frontage. Overall, Ms Manners’ opinion was that the subject land is superior because of its larger size, superior views and quieter location. [27] In my opinion, while the sales properties are not identical with the subject property, Sales Nos. 1 and 2, are sufficiently similar in terms of location and topography to enable a comparison to be made with the subject land. I have rejected the use of Sale No. 3. Sale No. 4 is less comparable in terms of elevation, topography and street frontage but it does demonstrate the price paid for land in the vicinity of the subject at about the relevant date. Ms Manners’ evidence was that she has identified and made adjustments for the difference in views, size, elevation, topography and street frontage of the sale properties as compared with the subject. Mr Bray’s appeal challenges whether sufficient allowance has been made for the combined effect of the three features he identified, that is, the slope of the land, the narrow frontage to Markwell Street, and/or the continuing loss of views of the Brisbane River from the land. [28] The Slope of the Land: Mr Bray’s land has a rather steep slope of approximately 10 metres from the front north-western corner of the block to the south-eastern corner. He indicated, in his cross-examination of Ms Manners, that this causes difficulty carrying out some gardening activities, such as mulching, in moving substantial items on to and away from the property, and in accessing parts of the property such as the filter room below the swimming pool. Some of these difficulties are exacerbated by the narrow street frontage of the property. [29] It is to be noted that the subject land is to be valued on the basis that the improvements have not been made. Thus, difficulties with the use of the subject land caused by the existing improvements should not be taken into account in determining its unimproved value. Of course that does not mean that the gradient of the subject land cannot be taken into account. Any difficulty caused by the slope of the land in its unimproved state would be a factor which would influence the reasonable purchaser in deciding on a price to be paid for the land. Sales Nos. 1 and 2 both concern sloping land in close proximity to the subject. The gradient on Sale No. 1 is about 4 metres and that on Sale 2 is about 8 metres. Each is less than the subject, but Ms Manners was aware of these differences and I accept her evidence that she had taken these differences into account in fixing the value of the subject. [30] Street Frontage: The appellant’s land has a frontage of 14.71 metres to Markwell Street. This allows a single and double gate and a letterbox. Ms Manner’s evidence was that Sale No. 2 had limited street access, because about half the front boundary of the property -- 6 of 8 -- 7 borders a narrow pedestrian pathway. The price paid for that property reflected the limited street frontage and I am satisfied that Ms Manners has allowed for the narrow street frontage of the subject in an appropriate way. [31] Views: Before considering the ground of appeal concerning the views from the subject property, it is convenient to deal with the appellant’s objection to Ms Manner’s describing the property as having possible views of buildings on the edge of the City. Mr Bray said, and I accept, that currently there are no such views available. If the subject were unimproved, it is possible, although I would think it is unlikely, that such views might be available. In any event, Ms Manners said that the valuation had been made on the basis that there were no such views available. I do not consider, therefore, that it is necessary to make any adjustment to her valuation in respect of this matter. [32] There were a number of matters specifically raised by the appellant in connection with the ground of the appeal relating to “the continuing loss of views” from the subject property. One concerned the potential impact of future redevelopment of the properties to the east and south of the subject. The evidence was that the redevelopment of 79 Markwell Street had impacted on the river views from the subject land and that the respondent has made an allowance for that. 77 Markwell Street has also been redeveloped. There was no evidence indicating that that redevelopment had impacted significantly on the subject land. 75 Markwell Street is improved with an older style residence and it is possible that it may be redeveloped. Mr Bray suggested that both 75 and 67 Markwell Street, which adjoin one another and the subject, were for sale, raising the possibility that these properties might be amalgamated and redeveloped. There was no evidence that those properties were on the market at the date of valuation. It is the case, however, that if 75 Markwell Avenue were redeveloped, the views from the subject could be impacted, depending on the nature of the redevelopment. [33] Mr Bray also suggested that the construction of the house at 13 Quarry Street (Sale No. 2) had interfered with his river views. There was no evidence as to when the construction had commenced, but the suggestion raises the possibility that, at the date of valuation, there was the potential that views to the south of the subject might be lost by such a construction. The contour map (Exhibit 10, p. 14, Ms Manners’ Valuation Report) indicates that the centre of 13 Quarry Street lies approximately 12 metres below the centre of the subject land, and therefore a house of standard permissible height (8.5 m) would not impinge on the views from that point. It may be that the views from the lowest point of the appellant’s land, the south-east corner, could be marginally affected. -- 7 of 8 -- 8 [34] Ms Manners’ evidence was that the property is valued with its existing views. On that basis, she rejected a suggestion from the appellant that if the views from the subject property were protected by an easement, the value of the property would be enhanced. She also said that she had not made any direct allowance for the potential loss of views from the subject property. However she pointed out that Sale No. 1 was in a similar position because that property could potentially lose the views to the east. In her opinion the price paid for that property reflected that possibility. [35] In my opinion, and in the absence of any definitive market evidence, it is logical that a reasonable purchaser would pay more for a residential property with views which could not be built out (whether because of the topography or because the views were protected by a registered easement) as compared with a property which is otherwise comparable except that some or all of the views may be lost. However, that does not mean that a deduction should be allowed from this valuation of the subject for the potential loss of views. Ms Manners has adopted the correct valuation methodology. She has selected comparable sales of lightly improved land. At least one of the sales (Sale No. 1) was a property which could lose the views to the east. The price paid for that property must be presumed to reflect how the market values such a potential loss. By applying the sale to the subject Ms Manners has valued the subject as a property with existing views, but which might lose its views. There is, therefore, no need to make any deduction for the potential loss of views. [36] Ms Manners’ evidence was that she had allowed for the differences between the sales properties and the subject. I have accepted her evidence. It is to be noted that s.56(2) of the Act provides that the burden of proving each of the grounds of appeal lies on the owner. In this case, the appellant has not discharged the onus of proof, and, therefore, the respondent’s valuation must stand. Orders [37] (i) The appeal is dismissed. (ii) The unimproved value of Lot 2 on RP 58441, Parish of Toombul, County of Stanley, as at 1 October 2001, as determined by the Chief Executive in the sum of Six Hundred and Thirty Thousand Dollars ($630,000) is confirmed. CAC MacDONALD MEMBER OF THE LAND COURT -- 8 of 8 --