Central Brunswick Town Square Community Body Corporate v Chief Executive, Department of Natural Resources [2000] QLC 55

LAND COURT BRISBANE 20 SEPTEMBER 2000 Re: AV99-513 An appeal against an unimproved valuation Valuation of Land Act 1944 Local Government: BCC-Brisbane Central Brunswick Town Square Community Body Corporate v. Chief Executive, Department of Natural Resources J U D G M E N T 1. The land the subject of this appeal was valued by the Chief Executive respondent at a figure of $285,000 as at a relevant date of 1 October 1998 in accordance with the provisions of the Valuation of Land Act 1944. The appellant lodged an appeal with this Court asserting that the value of the land ought to be $200,000, however, led evidence before me to a value of $50,000. 2. Valuation evidence in support of that figure was provided by Geoffrey Donald Trivett, a registered valuer, who also conducted the case on behalf of appellant. Alan Ross Kirby, a registered valuer, supplied valuation evidence in support of the valuation figure determined by the Chief Executive. 3. The grounds of appeal were drawn in terms I find difficult to understand, however, no concern was raised from the Chief Executive's side as to whether the evidence of Mr Trivett was within the four corners of these grounds, which were expressed as follows: "The assessment does not have reasonable regard to reasonable sales evidence, supply and demand criteria, redevelopment of other sites. For commercial or retail development, the capital value of the land cannot be supported by the current assessment, a bona fide vendor of the land acting reasonably would expect to take into account economic considerations applying at the time in determining a value for the land in its unimproved state." 4. The subject land has an area of 1,676 m² and is located at 20 Martin Street, Fortitude Valley. Martin Street is a narrow one-way street, which provides satisfactory vehicular access onto the subject land at the first floor level. There is paving on the subject land at that level designed to receive traffic from Martin Street. The actual frontage of the subject land to Martin Street is approximately 3 metres [2000] QLC 55 -- 1 of 5 -- 2 below street level: a topographic incident which would appear to facilitate development of the subject land either for its present use as a car park or for some other use. To the south of the subject land is a site which has been developed by the Queensland Housing Commission (Lot 6 on Registered Plan 903961 - "Lot 6") and which has basement car parking constructed at a similar level to basement car parking also found on the subject land and car parking at the Martin Street level which may be accessed through the subject land. To the north of the subject land is a corner site comprising a building units development, which is part of the Central Brunswick Development. I refer to that land as the "corner site". 5. The subject land is contained within the Town Plan for the City of Brisbane, gazetted in 1987 and is identified as part of "Parcel 3 of the Carlton United Brewery key site within Precinct 2 of the Fortitude Valley Development Control Plan", gazetted on 20 December 1996 and amended on 3 April 1998. The land is used for car-parking purposes in conjunction with the corner site and Lot 6. The subject land has 102 marked car spaces, with 53 being found on the lower level and 49 on the upper or Martin Street level. 6. A number of easements benefiting and encumbering the subject land provide for drainage and electricity service through and to the land, but more importantly, provide access between the subject land and the corner site, which is developed in a mixed-use way, including residential units. Access to the lower level car-park area on the subject land is afforded through the corner site, which takes advantage of the car parking as a facility used and to be used in association with the corner site development. Access through the subject land to Lot 6 is also provided at that level and there is a lease over car-parking spaces on Lot 6, however, that arrangement is not relevant for present purposes, but is mentioned for the sake of completeness only. Mr Trivett said that the car park on the subject land is not open to the public at large, but is a facility to be used in conjunction with those who visit the development on the corner site or who occupy premises on that site. The corner site and the subject land are owned by different legal entities, but apparently with common control. Mr Kirby noted in passing that there was a boom gate erected on the subject land which led him to suspect that those wishing to access the car park, might do so on the payment of a fee. 7. Mr Trivett described the subject land as being of regular shape, but said that because of its width it is not suitable for development purposes. Unfortunately, his written valuation report does not include evidence of the property's width, nor was -- 2 of 5 -- 3 that evidence provided in oral evidence. That omission is not, however, a matter of concern to me, given the conclusions that I draw later in these reasons. Based on his appreciation of the limited development opportunities available to the subject property, Mr Trivett adopted a nominal value of $50,000; that is a value not arrived at by reference to sales, but one dependent upon his general experience and appreciation of the marketplace. 8. Mr Kirby proffered two valuation methods in his written valuation report. The first of these was to value the subject land for redevelopment purposes into either commercial or residential units or a mix of the two. The second method employed by Mr Kirby was to value the subject land as used for car-parking purposes. 9. In his first method of valuation Mr Kirby concluded that the subject land area of 1,676 m² ought to be valued at $170 per m² or $284,920. He arrived at that conclusion after referring to sales of two properties at 650 and 652 Brunswick Street, New Farm, to the same purchaser on the same date, though with different vendors. These sales, which comprised areas of 542 m² at $357,500 and 554 m² for a price of $357,000, revealed to him (after the addition of $10,000 on each site for the demolition of existing improvements) an unimproved figure of $734,000 overall. There appears to be a mathematical error here of no moment. That calculates to a rate of about $670 per m² for the combined contracts. Mr Kirby said that he had regard to what he described as the "fettering" of the subject land, having regard to its use as a car park in conjunction with the corner site and, therefore, concluded a price of $170 per m². He entertained no doubts that the subject property could be developed, notwithstanding its size and frontage. The manner by which he had settled upon a value of $170 per m² for the subject property was not explored in evidence, however, it seems to me that Mr Kirby's valuation of the subject land for car-park purposes was probably his primary method with his reference to his value for development purposes being supplied as a check or support method. 10. Mr Kirby's second sale was for a property at 728 Ann Street, Fortitude Valley in June 1999. The sale price for a total area of 4,572 m² was $9,750,000, however, there were substantial improvements on the sale property, amounting to a value of $7,170,000 in Mr Kirby's opinion. He analysed the unimproved value of the land to a figure of $2,330,000 and, by a process of classification or summation, applied $400 per m² to the retail component of the sale land and $2,200 per car space to the 771 car spaces on the property. He reasoned that the subject land, which could accommodate 102 car spaces only, would have a higher value per allocated car space and, therefore, -- 3 of 5 -- 4 he applied a figure of $2,800 per car space to the subject property. Mr Trivett criticised the use of this sale as the property was developed as a commercial car park with a pedestrian viaduct being provided above street level to the McWhirters shopping venue across the road. For reasons, which I come to shortly, I think that criticism is misplaced. There are other concerns that one could raise with respect to Mr Kirby's valuation of the subject land by this second method: first, the high level of improvements on the sale property (see Clough v. The Valuer-General (1981) 8 QLCR 70 at 76); and, second, he has employed a classification of the sale property: a method which can involve a high element of subjective opinion. 11. In discussion with me Mr Trivett agreed that the subject land would, viewed as an independent site, have a value to the owner of the corner site which would otherwise have to supply car parking on site and at a cost to the level of development there. A sale to such an adjoining owner was, he agreed, an option which a hypothetical vendor of the subject property would reasonably pursue in an attempt to achieve the highest price for his property. He said that, nevertheless, such a sale would take place at a substantial discount to the value that the subject land would add to the corner site. The outcome of that discussion with Mr Trivett leads to the conclusion that the valuation of the subject land, by use of the nominal value approach, is not appropriate. 12. In cases such as this, it must be remembered that there is a "statutory onus of proof … cast upon the appellant" (Qualischesfki v. The Valuer-General (1979) 6 QLCR 167 at 172). It is clear that the appellant has not been able to demonstrate that the value of the subject land ought to be $50,000, or similar, based on a nominal value approach, nor the figure of $200,000, or similar, contained in the notice of appeal lodged with the Court. Of course, it is not a matter for the appellant to prove precisely a valuation figure, for it may be open on the evidence to conclude that the value of the Chief Executive is simply shown to be wrong. Guidance on this aspect of the law is provided by the High Court in Brisbane City Council v. The Valuer-General (1978) 5 QLCR 283 at 303: "The question then is whether a court on appeal is bound to accept the Valuer-General's figure as correct unless it is positively established that the true value is lower, or whether it is enough to show that the value was reached as the result of an error in principle. In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s.13(7) is rebutted." -- 4 of 5 -- 5 13. Whist the valuation of Mr Kirby is based on what I might describe as imperfect valuation bases, it is nevertheless the case that the appellant has not demonstrated that he proceeded on a wrong principle or made a serious error of fact. In such circumstances, I must dismiss the appeal. RP SCOTT MEMBER OF THE LAND COURT -- 5 of 5 --