Banks v Chief Executive, Department of Natural Resources [2000] QLC 36

LAND COURT BRISBANE 28 JUNE 2000 Re: Appeal Against Annual Valuation Valuation of Land Act 1944 Valuation Roll No.: 1983 Local Government: Calliope (AV98-144) Alexander R Banks v. Chief Executive, Department of Natural Resources (Hearing at Gladstone) D E C I S I O N Background: This matter relates to a parcel at 7 Elizabeth Street, Tannum Sands, and described as Lot 13 on Plan T82815, Parish of Iveragh. The subject land has an area of 663 m² and is located on the northern side of Elizabeth Street, about 0.7 km from the waterfront. The land is zoned as "Residential B" under the Calliope Shire Council Town Plan of 13 April 1991, and effective at the date of valuation of 1 October 1997. Access is good to Elizabeth Street, which is bitumen sealed. All normal utility services are available, and the subject land is situated above street level, and with a moderate fall to the north from front to rear. There are limited views through trees towards the ocean, and the subject land has a seaward aspect. The key issues are the nature of the land and comparison of sales. On 2 March 1998 the Chief Executive issued a valuation of the subject land at $55,000. Following an objection, the Chief Executive confirmed that unimproved value on 27 May 1998. The appellant has appealed that figure claiming the unimproved value should more properly be $35,000. Mr Alexander Banks appeared and gave evidence on his own behalf. Mr MS Craig, Acting Senior Valuer, appeared for the respondent, calling evidence from Brian Thomas Coe, the departmental registered valuer responsible for determining the valuation. [2000] QLC 36 -- 1 of 6 -- 2 The Evidence: Mr Banks argues that the Chief Executive has relied incorrectly on certain sales removed from the locality of the subject land. To support that conclusion, Mr Banks relies upon a newspaper article of 24 April 2000 of the "Gumdale Estate", advertising similar size lots at asking prices commencing at $37,000. Those new parcels are located only 182 metres to the south-west of the subject land. Mr Banks was unable to identify the actual new lots that were being offered at $37,000, or whether those lots were comparable to the subject land. Mr Banks further argues in his appeal that the location of the existing sewer line across the rear of his parcel is a further impediment against the use of the subject land. However, from the sketch plan supplied by the Calliope Shire Council, the location of that sewer line is well towards the rear of the parcel, and does not, in my opinion, directly restrict the existing dwelling building area. In an attempt to ascertain the valuation procedures adopted by the Chief Executive, Mr Banks has made three unsuccessful approaches to the respondent. There were no responses by the Chief Executive to allay Mr Banks' concerns, and he has been required to bring the matter to this Court seeking resolution. Mr Coe was unaware of those approaches by Mr Banks, but advises that Mr Banks had not requested an objection conference in order to discuss the matter. (1) The Nature of the Land - Mr Coe explained that the Tannum Sands locality is really identified as two distinct areas. The ridge line, roughly followed by Hampton Drive, separates the eastern sloping sector with a seaward aspect, from the western sloping lands with a western aspect. While a few lots in the western sector on the higher land near Hampton Drive may have partial glimpses of the ocean, the majority of the western aspect lots do not benefit from ocean views. Mr Coe argues that these two aspects represent different market areas. The subject land is in the seaward sector. To the west is the estate of Tannum Central, where lots are generally steeper, and have sold in the range of $35,000 to $45,000 per lot. Mr Coe notes that the "Gumdale Estate" is the final stage of the Tannum Central Estate. The final lot in a previous development in that area sold in early 2000 for $22,000. The cost of development is about $24,000 per lot, and Mr Coe sees no significance in that sale, which he argues does not represent the value of that parcel. Mr Coe also notes that there have been no recorded sales yet of the new "Gumdale Estate". -- 2 of 6 -- 3 Mr Coe advises that the western sector of Tannum Sands tends to have a ready supply of vacant new lots for sale, mainly as a consequence of the marketing strategies of developers in that locality. That compares with the more controlled marketing strategy of the developers in the seaward sector, where only small releases of six to eight lots are released to the market at any single time. Releases in the western sector tend to be larger, up to 30 lots at a time. As a consequence of the availability of lots, the lots in the western sector reflect lower prices. Mr Coe advises that of the 47 sales in Tannum Sands between June 1996 and June 1998, 28 were in the western sector, and 19 in the seaward sector. Mr Coe further advises that there are two recent estates in the seaward sector, which have covenants for brick homes and tend to reflect prices greater than $50,000 per lot. In those two estates developed by two brothers, there has been a predominance of house and land packages (15 of 19 lots) and Mr Coe has therefore relied only upon three of the private sales of vacant lands for his comparison. (ii) Comparison of Sales - Mr Banks relies on details of one sale at Booth Avenue (Lot 5 on Plan T82820) with an area of 630 m². Mr Banks understands that sale sold on 12 January 1997 for $39,000, while the respondent has applied an unimproved value of $47,500. However, Mr Coe advises that he had spoken personally to the purchaser who felt he had paid a fair price. The sale actually sold for $47,500, and was applied at an unimproved value of $39,000. Mr Coe sees that sale as inferior to the subject land. To support his valuation Mr Coe provides the following sales of vacant lands:  Sale 1 - (Charles Crescent - Lot 15 on Plan T82820). This is a 698 m² parcel, which is below street level, and falls moderately to steeply to the south-west to the rear, which abuts a lane access. There are limited sea views from the front of the parcel. The lot was purchased by an adjoining owner, who has since erected a dwelling towards the rear in an attempt to preserve views from his property on the adjoining lot. The sale is seen as inferior to the subject land. The sale sold on 8 October 1996 for $56,000, which, after allowing for clearing, was analysed at $55,250, and applied at $50,000.  Sale 2 - (Booth Avenue - Lot 220 on RP 611745). This is a 609 m² parcel, which is above street level with a gentle fall to the rear. There are limited views of the ocean. The sale is seen as similar to the subject land, with better topography, similar views, but greater traffic impacts. -- 3 of 6 -- 4 The sale sold on 24 September 1996 for $65,000, which, after allowing for some fencing and clearing, was analysed at $63,700, and applied at $55,000.  Sale 3 - (Darragh Street - Lot 63 on RP 853996). This is a 774 m² parcel, above street level and rising to the east to the rear. The sale has underground power and has limited sea views. This was an adjoining owner sale purchased to protect the purchaser's views. Mr Coe feels the price paid was high for adjoining owner reasons, and he has applied that sale conservatively at only 83% of the analysed value, and is supplied only as a supporting sale. The sale sold on 19 August 1996 for $73,500, which was analysed at $72,550, and applied at $60,000. In discussing his application of his sales for the current valuation in 1997, Mr Coe advises that beach-fronting lands actually doubled in value with some up to $168,000 per lot. Lands in the seaward aspect were generally increased by a factor of 20% (including the subject land); while lands in the western sector actually decreased by 10% in accordance with the sales evidence. Mr Coe further advises that there was no revaluation in 1998, and the latest valuation on 1 October 1999 rewrote the former unimproved values as the market had not changed since October 1997. Mr Banks supplied his 1 October 1999 assessment (Exhibit 3), although that is a separate matter and has no bearing upon the current appeal. Decision: I turn first to the appellant's concern that the respondent has adopted an inappropriate method of valuing the subject land. In that respect I note that Mr Coe has sought to compare sales of vacant lands in the general locality of the subject land, in order to draw direct comparisons with the subject land. That approach has long been recognised by Courts at all levels as the preferred method of determining unimproved value. That was perhaps best explained in PH Clough v. The Valuer- General (1981-81) 8 QLCR 70, where the Land Appeal Court said at p.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. The reason is obvious. In applying such sales there is no room for error in analyzing the value of improvements." -- 4 of 6 -- 5 The principle was also followed in R & MM Barnwell v. The Valuer-General (1989) 13 QLCR 13, at 17; and also in WM & TJ Fischer v. The Valuer-General (1983) 9 QLCR 44, where the Land Appeal Court said at p.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." On the evidence supplied, there is nothing to discredit Mr Coe's method of valuation. I turn then to the comparison of sales and note that Mr Coe's sales support his assessment of the unimproved value at $55,000. Unfortunately, Mr Banks has apparently misunderstood the actual sale price and applied unimproved value of the Booth Avenue sale, and that provides little assistance to his estimate of the value of the subject land. In respect of Mr Banks' reliance upon the "Gumdale" advertisement, I find that merely to represent the prices that lots are to be offered for sale, and not any conclusive sale transaction. The weight to be attached to an "offer" was addressed in the matter of Hall & Anor v. Chief Executive, Department of Transport (A95-33), 14 November 1997, unreported, where the learned Member analysed the findings of Wilcox J in Goold v. The Commonwealth (1993) 79 LGERA 407. In the Goold matter Wilcox J found at p.417: "How much weight should be given to such an offer is a question to be determined by reference to the facts of the particular case. In some cases, the appropriate weight may be minimal; in others considerable." On the evidence, I believe the advertisements are no more than the intentions of the vendor, and do not represent any material offer by any prospective purchasers. I place no weight upon that matter. In any case, the specific characteristics of the parcels on the "Gumdale Estate" were not clarified by Mr Banks, and that advertisement provides little assistance to me. In respect of the dates of the above advertisement, and also the recent respondent's revaluation of the subject land at 1 October 1999, those are really matters for consideration in respect of the more recent valuation, and not of the current matter. However, as Mr Coe advises that the market has not changed in the period 1997 to 1999, some weight could be attached to more recent sales evidence. That was explained by the High Court of Australia in McCathie & Ors v. The Federal Commissioner of Taxation (1944) 69 CLR 1, where Williams J said at p.16: -- 5 of 6 -- 6 "Subsequent sales are just as admissible in evidence as prior sales, provided that in all the circumstances they are comparable. If between the material date and the date of the subsequent sale supervening events occur which alter the conditions previously existing, the subsequent sales would not be comparable and would be useless." That was also followed in Federal Commissioner of Taxation v. Harris (1980) 30 ALR 10, at 18. However, in Harris, Fisher J noted at p.25 that the subsequent event cannot create an expectation, which was not in existence at the relevant date. In considering this matter, I am also reminded that under s.45(4) of the Valuation of Land Act, the onus is upon the appellant to prove his grounds of appeal, where, when referring to the Notice of Appeal the Act states: "45.(4) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner." Unless that responsibility is exercised, then s.33 of the Act dictates that the valuation shall stand. "33. any and every valuation, or alteration of the valuation, of any land made, or purporting to be made under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered." That followed directions from the High Court in Brisbane City Council v. The Valuer- General (1977-78) 140 CLR 41, at 56. Conclusion: Having considered the whole of the evidence, I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value as determined by the Chief Executive at $55,000 is affirmed. (NG Divett) MEMBER OF THE LAND COURT -- 6 of 6 --