Bartle v Chief Executive, Department of Natural Resources and Mines [2002] QLC 25

[2002] QLC 25 LAND COURT BRISBANE 26 MARCH 2002 Re: Appeal against Annual Valuation Valuation of Land Act 1944 Shire of Beaudesert (AV2001/0199) George E Bartle v. Chief Executive, Department of Natural Resources and Mines (Hearing at Beaudesert) D E C I S I O N This is an appeal by a landowner in the Shire of Beaudesert against the unimproved value applied to his property by the Chief Executive, Department of Natural Resources and Mines (the respondent) under the provisions of the Valuation of Land Act 1944. Background Mr GE Bartle is the owner of land described as Lot 2 on Registered Plan 165562, Parish of Cedar, containing an area of 3,118 m². As at 1 October 2000, the respondent applied an unimproved value of $98,000 to that property. Mr Bartle objected against that valuation and succeeded in having it reduced to $85,000. However, Mr Bartle exercised his right to further challenge the valuation and appealed to the Land Court, advising that his estimate of the unimproved value was $40,000. The grounds of Mr Bartle's appeal related to:  water run-off;  the shape of the land;  relativity with the valuations applied to other properties; and  access. The Subject Land The property, the valuation of which is subject to this appeal, is situated at 1-5 Alpine Terrace, Mt Tamborine, approximately 6 km south-east of the North Tamborine Post Office. According to the report of the respondent's expert witness, registered valuer Mr WJ Crothers, access to the subject land is by Alpine Terrace, which is a -- 1 of 7 -- 2 continuation of Bartle Road, which leads off the Main Western Road. These roads are all bitumen sealed, with earth shoulders and drainage. Mr Crothers went on to comment that although Alpine Terrace is slightly elevated above the subject property, vehicular access onto the land is good. He also commented that these roads form part of an alternative access from Tamborine Mountain to the Gold Coast Mr Crothers described the land as comprising a triangular shaped internal allotment, with an easy slope away from Alpine Terrace to the east and with a crossfall to the south. He commented that some stormwater from Alpine Terrace is diverted and discharged onto the subject property forming two shallow run-offs on both sides of the residence, which then meet and continue to the rear of the property. The residence is constructed on the top side and between these waterways. He stated that the contour is not uncommon on the mountain. The subject land is zoned "Rural A" under the Beaudesert Shire Town Plan, which was gazetted on 9 February 1985. It is used as a residential site and Mr Crothers expressed the view that it has no potential for any higher use under the current zoning. The land has been cleared and planted with a number of fruit trees. It has been valued as a house site by comparison with sales in the Tamborine Mountain area. The Relevant Legislation The responsibilities of the respondent are set out in the various provisions of the Valuation of Land Act 1944. The respondent is required to make annually, or periodically, a valuation of all land in a local government area: s.37. For the purposes of the Act, the valuation of each parcel of land is to be the "unimproved value" of that land, which is defined to mean 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 improvements on that land did not exist: s.3(1). However, the unimproved value shall in no case be less than the sum that would be obtained by deducting the value of improvements from the improved value at the time at which the value is required to be ascertained: s.3(2). The "value of improvements" means the added value which the improvements give to the land, irrespective of the cost of the improvements. However, the added value shall in no case exceed the amount that should reasonably be involved in effecting improvements of a nature and efficiency equivalent to the existing improvements: s.5. The Act thus requires the respondent to ascertain the unimproved market value of each parcel of land as at the date of valuation, assuming that the improvements on the land had not been made, but also assuming the existence of all -- 2 of 7 -- 3 present facilities and amenities external to the land, such as roads, power and other services, and assuming also that the adjoining land and the environs are in their existing condition. The test of "market value" was laid down by the High Court in Spencer v. The Commonwealth (1907) 5 CLR 418. The High Court found that the market value of land at a particular date is the amount that would have been paid for that land if it had been sold by a willing but not over-anxious seller to a willing but not over-anxious purchaser, both of whom are fully acquainted with the land and aware of all the circumstances which might affect its value, either advantageously or negatively. However, the Act provides for some exceptions to the unimproved market value concept. One of those exceptions is where land is used exclusively for purposes of "farming", any enhancement in the value of that land because of the potential for some other use, must be disregarded when the valuation is made: s.17(1). The word "farming" is defined in detail in sub-s.(2) of s.17 of the Act. It is well-settled law that sales of vacant or unimproved land provide the best basis for the assessment of unimproved value: see Grahn v. The Valuer-General (1992) 14 QLCR 327. The Respondent's Valuation Mr Crothers relied upon two basically unimproved sales to support his valuation of $85,000. Sale 1 is situated in Bartle Road to the north of the subject land, has an area of 3,840 m² and is zoned "Rural Residential A". It sold in January 2000 for $100,000 and was analysed by Mr Crothers to show an unimproved value of $95,000. As at 1 October 2000, the respondent had applied a valuation of $90,000 to that property. Mr Crothers described that property as being an irregular shaped internal allotment, located approximately 320 metres to the north-west of the subject land. The land has an easy fall to a watercourse in the west and due to its situation behind three residential properties receives most of the local run-off from its neighbours along Bartle Road. However, those three properties shield it to some extent from traffic noise. Mr Crothers considered the sale to be comparable to the subject land in size, slope and water problems, but thought it to be marginally superior because of the less intense traffic noise. Sale 2 is situated in Wilson Road to the south of the subject land. It has an area of 3,983 m², is zoned "Rural Residential A" and sold in November 1999 for $65,000. -- 3 of 7 -- 4 Mr Crothers analysed the sale to show an unimproved value of $62,000 and as at 1 October 2000, the respondent had applied a valuation of $61,000 to that property. Mr Crothers described that property as being a regular shaped inside allotment, about 2 km south of the subject land. The site is elevated at the rear, with a slight slope to the east and falling towards the road. Approximately 50% of the land is prone to run-off. He considered it to be inferior to the subject land in topography, particularly with regard to the stormwater run-off. Overall, he considered the sale to be inferior to the subject land. Mr Crothers explained that he had originally applied an unimproved value of $98,000 to the subject land. However, to make better allowance for the problems associated with traffic noise and run-off, he had reduced the valuation to $90,000. After having closer regard to the sales, he further reduced the valuation to $85,000. The Case for the Appellant Mr GE Bartle appeared and gave evidence, as did his son Mr DB Bartle. Mr Bartle Senior explained that there are several factors adversely affecting the subject land: the land slopes down from the west and the south to the north; because of its long frontage to a bitumen road the water run-off is, as he put it, "pretty intense", but does not last long because the deep red soil and the steep slope takes the water away quickly; while he had been able to divert the water around the house, the erosion prevented him from growing small crops, instead he had planted some rainforest and avocado trees. Mr Bartle contended that his property was the worst affected by water run-off in the area. Mr Bartle went on to say that he would never have built the house on the subject land if he had had the choice, but it was the fine house on the land which had attracted him to purchase it 48 years ago. The land is triangular in shape which limits its usefulness as the angles are sharp, with a long frontage to Alpine Terrace, which is an extension of Bartle Road. Mr Bartle explained that despite the fact that Mt Tamborine is famous for its panoramic views, there is no view from the subject land because of its low-lying nature. The road pavement is approximately a metre above the front of the land, with a steep slope from the road. With the very significant increase in traffic, as Alpine Terrace has become a major traffic route to Nerang and the Gold Coast, access and egress to the subject land is difficult and dangerous during peak traffic times, with traffic noise worse than it ever has been, particularly on holidays and weekends. -- 4 of 7 -- 5 By way of comparison, Mr Bartle referred to the valuations of two properties of around 4,000 m², one situated in Wilson Road, almost opposite Mr Crothers' Sale 2 and the other situated in Bateke Road further to the south-east. The Wilson Road property has an area of 4,439 m² and was valued by the respondent at $63,000 as at 1 October 2000. It is almost rectangular in shape and Mr Bartle contended that it is not only superior in size and shape to the subject land, but has good access with no drainage problems. He was unable to reconcile the valuation of his property at $85,000 with the $63,000 applied to the comparison property. Unfortunately the Bateke Road property was not precisely identified by Mr Bartle, but he contended that it has an area of about 4,000 m², has a regular shape and although it suffers from some run-off near the bottom of the block, it has a reasonable view of the mountain. Again, he could not understand why such a property which was larger, with better shape, suffering from fewer disabilities than his property, should be valued at $69,000 compared with the valuation of his land of $85,000. The Issues Mr Bartle's challenge to the valuation was based on the relativity of valuations of his property compared with the two comparison properties, both of which he considered to be superior. On the other hand, Mr Crothers supported his valuation of the subject land by direct comparison with what he considered to be comparable, lightly improved sales. As Mr Bartle's comparison property in Bateke Road could not be identified, Mr Crothers was unable to make any comparison. However, he was able to describe the Wilson Road comparison property (which is almost opposite his Sale 2) as higher in elevation than the sale property, with reasonably level access from the road. He was unable to say whether it had a water problem. Mr Bartle had little knowledge of Mr Crothers' Sale 1. While he knew the general area, he admitted that any attempted comparison would be purely guesswork. However, he was familiar with Sale 2, and while he generally agreed with Mr Crothers' description of the property, he could not agree with Mr Crothers' opinion that it was inferior to the subject property. Mr Bartle contended that by comparison to the valuations applied to his two comparison properties, the valuation of the subject land should be $40,000, as stated in his Notice of Appeal. Mr Bartle's son, Mr DB Bartle, is the owner of Lot 144, which adjoins his father's comparison property on Wilson Road to the west and is only one property removed from being opposite to Mr Crothers' Sale 2. Therefore, he was able to -- 5 of 7 -- 6 describe the water flow over Sale 2, which he considered to be very similar to his father's land, except that the sale was superior in both shape and size. He was also able to give evidence regarding the problems of access to and egress from his father's property, which he said had become progressively worse with the increase in traffic. Mr Bartle conceded that the purchaser of Sale 2 had constructed an elevated driveway with a culvert to cross a wide open depression situated at the front of the allotment, as had the owner of Lot 18 to the east, but he thought there would not be the same extent of run-off as affected the subject land. Mr Crothers had a different opinion about the run-off on Sale 2. His investigations had indicated that half the allotment was affected. He considered the problem on Sale 2 to be equal to, if not worse than, that on the subject land. It was clear that Mr Crothers considered the subject land to be situated in a better area than Wilson Road, where Sale 2 and Mr Bartle's comparison block are situated. He described Alpine Terrace as "quite a good street", with most properties backing onto the escarpment with panoramic views and upon which fine houses had been constructed. Without meaning to be pejorative, he used the analogy of the subject land being "like a poorer block in a better street". By this explanation, I understood him to mean that the environment of the subject land was superior to that in Wilson Road. However, a comparison of the relativity of values of surrounding properties proved pointless, as most of the neighbouring properties were used for "farming" and had been valued under the concessional provisions of s.17 of the Act, while the subject land had been valued as a residential site. Despite the acknowledged problems of the subject land, Mr Crothers was confident of the relativity of the valuation of $85,000, compared with those of Sale 2 of $61,000 and Mr Bartle's comparison property in Wilson Road of $63,000. Clearly, Mr Crothers placed greatest weight on his Sale 1 in Bartle Road, an environment which he considered to be similar to that of the subject land. Despite its shape and water problems, he considered it to be marginally superior because of the surrounding houses which protected it from the full impact of traffic noise. It emerged in evidence that although the land was surrounded by trees, which some purchasers may find attractive, it would as he put it, "… get precious little breeze". Later, he said that he would prefer to have a breeze than be surrounded by trees. However, essentially Mr Crothers considered that the advantage enjoyed by Sale 1 over the subject land was in respect of the sheltering from traffic noise. Conclusion -- 6 of 7 -- 7 I accept that the subject land has an awkward shape and slope which restricts the siting of a house. It suffers from water run-off problems, access difficulties and severe traffic noise. On the evidence, I find that the subject land is superior in value to Sale 1 and the comparison property in Wilson Road, because of its better environment. The relativity of values between Wilson Road and the subject land seems reasonable. However, it is difficult to compare the value applied to Sale 1 and that applied to the subject land. While Sale 1 is in the same general environment, it is vastly different in shape, being what could be described as "hatchet" shaped or perhaps more accurately, "battle-axe" shaped, with access by means of a long narrow "hatchet handle" of land. Mr Crothers had made the best possible comparison between that property and the subject land, but the fact remains that a homesite on Sale 1 would be largely sheltered from the traffic noise, which was so much a feature of the appellant's case. Although it may have "precious little breeze", it seems that the Sale 1 property has a wooded outlook, which may be an advantage over the outlook from the subject land. Therefore, having regard to those factors, I consider that the evidence is such that I should make some further adjustment to the valuation. I will therefore reduce it to $80,000. Order The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the subject land as at 1 October 2000 is determined at Eighty Thousand Dollars ($80,000). JJ TRICKETT PRESIDENT OF THE LAND COURT -- 7 of 7 --