Andison v Chief Executive, Department of Natural Resources [2000] QLC 42

LAND COURT, BRISBANE 28 June 2000 Re: Appeal against Annual Valuation Valuation of Land Act 1944 Valuation Roll No: 804-2969 Local Government: Shire of Bowen. (AV99-1258). Thomas J and Betty A Andison v. Chief Executive, Department of Natural Resources (Hearing at Bowen) D E C I S I O N Background: This matter relates to a property at 8 Horseshoe Bay Road, Bowen, and described as Lot 11 on RP 729094, Parish of Pring. The subject land is located approximately 4km north-east of the Bowen Post Office, and fronting the esplanade at Queens Beach. Access to the subject land is good from Horseshoe Bay Road which is bitumen sealed with concrete kerbing and channelling. All normal utility services are available, and the subject land is a near-rectangular parcel sloping gently from Horseshoe Bay Road to the esplanade. The subject land has an area of 1289 square metres, and is zoned as "Residential" under the Bowen Shire Council Town Plan of 28 May 1998, and current at the date of valuation of 1 October 1998. The key issues are the nature of the land and comparison of sales. On 29 March 1999, the Chief Executive issued a valuation of the subject land at $115,000. Following an objection the Chief Executive confirmed the valuation on 25 August 1999. The appellants have now appealed that figure, claiming that the unimproved value should more properly be $80,000. Mr Bevan Conroy, a Registered Valuer, appeared and gave evidence for the appellants. Mr Damien Grealy, Counsel of Crown Law, appeared for the respondent, calling evidence from Andrew Trevor Brown, the Departmental Registered Valuer now accepting responsibility for the valuation. The original valuation was determined [2000] QLC 42 -- 1 of 8 -- 2 by another valuer who is no longer available. With the agreement of both parties the Court inspected the subject land and all of the sales. The Evidence: (1) The Nature of the Land - There is agreement between the parties in respect of the general topography of the subject land, and its direct access to the beach via Queens Beach Esplanade. However there is some divergence in respect of the availability of sea views from the subject land, and the impact upon privacy. Mr Brown agrees that the sea views are restricted by vegetation along the esplanade. However Mr Brown argues that vegetation also affords a good level of privacy for the subject land from pedestrians along the concrete and paved walkway along the esplanade, and also from passing traffic along Horseshoe Bay Road. Mr Conroy argues that the sea views are very restricted and obstructed by the vegetation; but concedes that there is an impact upon the privacy from the high level of pedestrians along the walkway. In seeking comparisons with sales of other lands, Mr Brown has weighed the impact of the adjoining vegetation along the esplanade in respect of obstructing sea views, but also affording a higher level of privacy. (2) Comparison of Sales - To support his estimate of the unimproved value, Mr Conroy provides the following sales:  Sale 1 - (18 Thomas Street - Lot 8 on RP 745491) This is a 1,012 square metre vacant corner flat parcel on the western side of Thomas Street, with some views of the ocean. The sale is closer to schools and shops, and also smaller in area, and is seen as inferior to the subject land. The sale was provided as one of only a few of beachfront lands with water views in the area. Mr Conroy saw the sale as a low sale, and he has not placed much reliance upon it. The sale sold on 8 September 1998 for $30,000.  Sale 2 - (15 Thomas Street - Lot 12 on RP 838634) This is a 1,277 square metre vacant corner parcel with esplanade frontage, with uninterrupted ocean views across Port Denison and Bowen Harbour. The sale is closer to shops and schools, and the esplanade has only light vegetation and no public walkways to intrude upon the privacy of the sale. However the esplanade has a gravel -- 2 of 8 -- 3 road in front of the sale which allows intrusion of privacy from traffic. Being comparable in size, Mr Conroy sees the sale as slightly superior to the subject land. The sale sold on 5 August 1998 for $85,000. Mr Conroy does not agree that the locality of Sales 1 and 2 is inferior to the Horseshoe Bay locality of the subject land, as he notes that comparable sales of beachfront lands with sea views in that locality indicate values comparable to that placed upon the subject land.  Sale 3 - (51 Horseshoe Bay Road - Lot 21 on RP 707516) This is an 809 square metre parcel on the southern side of Horseshoe Bay Road, with partly obstructed views across Queens Bay. The sale sold in September 1996 for $50,000, and was applied at $56,000.  Sale 4 - (89 Horseshoe Bay Road - Lot 1 on RP 735772) This is a 650 square metre parcel on the southern side of Horseshoe Bay Road, with similar features and views as Sale 3. The sale is also seen as inferior to the subject land. The sale was purchased by an adjoining units' owner (Body Corporate for Beachfront Apartments), and is seen as inferior to the subject land due to less direct access to the beach, and its smaller size. Mr Conroy was not aware of any potential adjoining owner influence, and concedes that should be examined before adopting the sale. The sale sold in September 1996 for $55,000.  Sale 5 - (28 Horseshoe Bay Road - Lot 16 on Plan B6686) This is an 809 square metre improved parcel with an older-style masonry block dwelling. The sale has direct access to the beach via the esplanade, and has similar interrupted views of the water as the subject land, although the taller vegetation at the sale allows better glimpses of the water under the canopy. Overall the subject land is seen as marginally superior due to its larger size. The sale sold in March 1997 for $122,000, and was applied at $100,000. The sale was not analysed, but provided merely to demonstrate the value that is paid for an improved parcel in that locality. Mr Conroy concedes that it is preferable to use vacant land sales where they are available.  Sale 6 - (24 Horseshoe Bay Road - Lot 18 on Plan B6686) This is an 609 square metre parcel with esplanade frontage and interrupted ocean views similar to Sale 5. Due to the slightly lighter vegetation along the esplanade at that location, the views of water are slightly better than the subject land. -- 3 of 8 -- 4 Mr Conroy understood from discussions with agents, that, at the time of sale, there was an older-style fibro cement and timber dwelling upon the land. Overall the sale was seen as marginally superior to the subject land. The sale sold in March 1996 for $105,000. Mr Conroy did not analyse the sale.  Sale 7 - (Queens Beach Esplanade - Lots 42 to 44 on RP 705709 and Lot 45 on Plan HR 840146) This is a 3,263 square metre parcel containing several older-style buildings used for church hall and camp purposes. The sale is on the western side of Queens Beach Esplanade, and has views of Queens Bay except for a low sand dune which obstructs views at ground level. There is little vegetation on the esplanade at that locality. The sale was a late sale, and was analysed at $150,000, after allowing for nil added value for the old buildings. The sale sold on 16 March 1999 for $150,000. The sale is considered superior to the subject land in all respects. To support his valuation Mr Brown supplies the following sales of vacant land:  Sale 1 - (24 Horseshoe Bay Road - Lot 18 on Plan B6686) This is a common sale with Mr Conroy's Sale 6. Mr Brown saw the sale to have similar views as the subject land, and after allowing for some clearing and fencing, the sale was analysed at $103,800, and applied at $100,000. The sale was seen as slightly inferior due to the larger size of the subject land. Mr Brown saw the additional privacy afforded the subject land by the heavier vegetation, as outweighing the better views from his Sale 1. Mr Brown made enquiries with the Bowen Shire Council (the Council), which disclosed no application to demolish any old dwelling upon 24 Horseshoe Bay Road. Council records also revealed that Sale 1 had occurred on 8 March 1996, and a new building application was lodged on 16 May 1996, indicating, in Mr Brown's opinion, that there was no building of any added value at the date of sale. That fact was also confirmed by both the vendor and purchaser of Sale 1, and supported by a real estate agent. -- 4 of 8 -- 5  Sale 2 - (15 Thomas Street - Lot 12 on RP 838634) This is the same as the appellants' Sale 2. The sale was analysed at $83,200, and applied at $80,000. Mr Brown saw the location of Sale 2 as inferior to the subject land, and overall the sale was seen as inferior.  Sale 3 - (18 Wentworth Street - Lot 254 on Plan B662) This is a 1,012 square metre inside parcel, with limited views over Port Denison. It has gravel road access and no sewerage available. The sale was seen as inferior due to size, location and views, which are partly restricted by mangroves. The sale sold in July 1997 for $50,000 which was analysed at $48,200.  Sale 4 - (57 Golf Links Drive - Lot 22 on RP 706889) This is a 1,004 square metre regular shaped corner parcel on the west of Golf Links Drive, with limited views to the ocean across Bowen Golf Course. The sale was a late sale and is seen as inferior due to size, location and views to the water. However the views from Sale 4 appeared less obstructed than at the subject land. The sale however did not have direct access to the beach via the esplanade. The sale sold on 12 May 1999 for $72,500, which was analysed at $71,000, and applied at $66,000.  Sale 5 - (1 Murroona Street - Lots 501 and 502 on Plan B6643) This is a 2,024 square metre level corner parcel, with limited views of the ocean across parklands to Queens Beach. The sale was a late sale and seen overall as superior due to its larger size, but with inferior location. The sale sold on 28 September 1999 for $135,000, which was analysed at $133,000, and applied at $101,000. In addition to those sales Mr Conroy also notes that the subject land sold on 1 March 1999 for $210,000. However that was a highly improved sale, and also well after the relevant date. He has therefore made no reliance upon that sale, other than to note that the depreciated replacement costs of the improvements was assessed by him at $130,000, which, he argues, supports his estimate of $80,000 for the land value. Decision: (i) The Nature of the Land - From the evidence and the inspection, it is clear that direct access to the beach esplanade is a key factor in the priorities of purchasers in that locality. Direct access -- 5 of 8 -- 6 to the water, and views to the ocean, tend to dominate the influences upon higher prices for land. However also impacting the price of lands with direct esplanade frontage, is the preference for privacy of home ownership. Where special pedestrian walkways have been created along the esplanade, the existence of vegetation along the esplanade is both an advantage and a disadvantage. On balance I believe the slightly better views from Mr Conroy's Sale 6 is balanced by the better privacy of the subject land. (ii) Comparison of Sales - In seeking comparisons I note that Mr Conroy's Sale 7 occurred after the date of valuation, but prior to the date of issue on 29 March 1999. Accordingly that sale could be considered as relevant. (See KP and RD Weisenberger v. Valuer-General (1978) 5 QLCR 125; and also in RG McMurray v. Valuer-General (1983) 9 QLCR 35, at 36.) However Mr Brown's Sales 4 and 5 are both well after the relevant period, and unless it is demonstrated that the market has not changed in that additional period, then those two sales are best considered in any subsequent revaluation. I note also the very conservative application of Sale 5. In view of the alternative sales of vacant lands available, I get little assistance from those three sales. In respect of Mr Conroy's Sale 1, I note that he has made no reliance upon that sale, and I will reject its comparison. If I then look at Mr Conroy's Sale 5 I note that is an improved sale, and only provided to indicate what a comparable improved sale in that locality of the subject might bring. In view of the general principle adopted by the courts, that sales of vacant lands are preferred when determining unimproved value, I will ignore Sale 5. (See PH Clough v. Valuer-General (1981-82) 8 QLCR 70, at 76.) Any comparison with Mr Brown's Sale 3 ($48,200), would support that sale to be inferior, and is supported by the inspection which showed the locality to be inferior to the subject land. If I also look at Mr Conroy's Sales 3 and 4 I find those to be in the same locality, but to have a considerably inferior access to the beach and esplanade. That then leaves what are the two key comparisons being the common Sale 6 (24 Horseshoe Bay Road); and the common Sale 2 (15 Thomas Street). While 15 Thomas Street is beachfront land with access to the esplanade, and views of the water, -- 6 of 8 -- 7 its locality, in my opinion, is inferior to Horseshoe Bay. The key sale therefore in my opinion is 24 Horseshoe Bay Road. In considering that sale, and the subject land, I find Mr Conroy sees that sale to be marginally superior due to the better views; while Mr Brown sees the sale to be slightly inferior due to the larger size of the subject land and the greater privacy. In analysing his Sale 6, Mr Conroy would appear, on the evidence, to have been incorrectly advised in respect of an added value of improvements within the sale price of $105,000. In view of the differing opinions by the experienced valuers, I will accept that the better views of Sale 6 are balanced by the greater privacy of the subject land. On that basis alone, an analysed value for the subject land could be $103,800, with an applied value of $100,000. That application would also support the conservative application of Sale 2 (15 Thomas Street) at 96%. However if I consider the greater size of the subject land (1,289 square metres) compared to Sale 6 (809 square metres), I believe the unimproved value should also reflect that additional factor. It is noted that residential sites are purchased on a site basis, and not on a per square metre basis. (See Hans and Else Grahn v. Valuer- General (1992-93) 14 QLCR 327, at 330.) However there is often some additional premium paid for an additional area beyond normal building area. In seeking guidance on what additional premium might attach to a larger parcel as a homesite, I note that Mr Conroy's Sale 5 (650 square metres) actually sold for $5,000 more than the larger parcel of Sale 3 (809 square metres). However the adjoining owner influence involved in Sale 4 suggests that there may have been some additional premium paid for that purpose. The only evidence that I then have to guide me in respect of additional premium is the relativity adopted by Mr Brown. Mr Brown has applied a further $15,000 (15%) for the extra 480 square metres of the subject land, compared to Sale 6. He has also applied a similar premium to the parcel adjoining the subject land (Lot 10 on RP 729094). In the absence of evidence to the contrary, I will adopt that premium for the subject land because of its larger size. Summary: I am reminded that the onus to prove their case rests with the appellants under section 45(4) of the Act. Unless it is demonstrated that the Chief Executive has used a wrong principle, or made a serious error, then section 33 of the Act dictates that the -- 7 of 8 -- 8 unimproved value as determined by the Chief Executive is deemed to be correct. (See Brisbane City Council v. Valuer-General (1977-78) 140 CLR 40, at 56.) On the evidence I believe that the appellant has failed to satisfy that responsibility, and the valuation of the Chief Executive should therefore not be disturbed. Conclusion: Having considered the whole of the evidence I am not persuaded that the appellants have proved their case. The appeal is dismissed, and the unimproved value of Lot 11 on RP 729094 as determined by the Chief Executive at $115,000 is affirmed. (NG Divett) Member of the Land Court -- 8 of 8 --