D'Ath v Chief Executive, Department of Natural Resources [2000] QLC 4

LAND COURT, BRISBANE 28 JANUARY 2000 Re: Determination of Unimproved Value – City of Brisbane – Division of Tingalpa. (Ref. AV98-650). JM and A D'Ath v. Chief Executive, Department of Natural Resources D E C I S I O N This appeal is against the determination by the respondent Chief Executive of an unimproved value of $83,000 for a parcel of land described as Lot 38 on RP99715, Parish of Bulimba, containing an area of 579 m². The land is situated at 12 Balloch Street, Wishart, and the relevant date for the determination of the unimproved value is 1 October 1997. Joseph Michael D'Ath furnished evidence in support of the appellants' rather voluminous grounds of appeal. But even more voluminous is a statement put in evidence by Mr D'Ath (Exhibit 2). But before Mr D'Ath commented upon the exhibited material, Mr Paterson, Counsel for the respondent Chief Executive, submitted that most of the matters raised by Mr D'Ath in his statement were irrelevant and some of them highly offensive and perhaps in another context might even give rise to an action for defamation. After hearing and considering Mr Paterson's submission, and a limited response by Mr D'Ath, the Court ruled that most of Mr D'Ath's statement of evidence was either inadmissible or irrelevant and was struck out. To clarify the situation, and I do not feel the need to quote all the irrelevant passages from Mr D'Ath's statement, I might say that the following parts of Exhibit 2 were removed: Pages 1 and 2 – Paragraphs 1, 2, 3, 4 and 6 Pages 4, 5, 6, 7 and 8 – Paragraphs 9, 10, 11, 12, 13, 14, 18, 19, 20, 23, 24, 25, 26, 27, 28, 29 and 31 (sub-paragraphs 1-8). [2000] QLC 4 -- 1 of 7 -- 2 I comment on the remaining segments of Mr D'Ath's statement. Page 2, paragraph 5 – "5. The lack of consultation between the Department of Natural Resources and the nominal owners of the land with regard to the arbitrary increases in the valuations imposed by The Department. This means, that presently no consideration is given to the economic, physical or psychological effect that such arbitrary increases in land valuations have on those who cannot pass on the increased costs to another party. We consider this a gross and inexcusable injustice, imposed on us because we are the most powerless members of society." This paragraph really provides no basis for the Court to consider whether the valuation under appeal is excessive or unreasonable. The Land Appeal Court and this Court have often commented that reference to increases in valuations upon the revaluation of lands within a local authority area is not a worthwhile ground of appeal. What has to be determined is the unimproved value of a specific parcel of land as at a specific relevant date, and this is best assessed with reference to sales evidence. No such evidence was produced by the appellants. Page 2, paragraph 7 – "Our Right to make public The Court's findings when the hearing is completed." The Court's findings will be in the form of a written decision to be handed down in open court. Page 2, paragraph 8 – "We retain the Right to bring a Class Action in the Supreme Court against the Department of Natural Resources if we consider it necessary. This will probably require our going public with the results of this hearing." This is a matter for the appellants. Page 3, paragraphs 1 and 2 – "The best way to begin this analysis is by tabulating the land valuation increases from 1983 to the present because they bring the argument to everyone's attention most forcefully. They constitute evidence that is not, repeat NOT, anecdotal. The extraordinary leaps made in these increases speak for themselves, which, perhaps, is why they have never been explained by the former Department of Lands or the present Department of Natural Resources. We fail to see how such grossly -- 2 of 7 -- 3 indecent leaps and jumps in valuation increases could be explained by sensible people. Valuation Effective At Percent Increase 01/07/83 $8,450.00 01/07/84 $8,450.00 01/07/85 $8,450.00 01/07/86 $8,450.00 01/07/87 $26,000.00 207.7% 01/07/88 $26,000.00 01/07/89 $26,000.00 01/07/90 $44,000.00 69.23% 01/07/91 $57,000.00 29.55% 01/07/92 $57,000.00 01/07/93 $68,000.00 19.3% 01/07/94 $68,000.00 01/07/95 $75,000.00 10.3% 01/07/96 $75,000.00 01/07/97 $75,000.00 01/07/98 $85,000.00 13.34% (first valuation) 01/07/99 $83,000.00 -2.35% (decrease after first appeal) From the 1st of July 1983 to the 1st of July 1998, fifteen years (15), the valuation of our land has increased by a staggering $76,550.00, or nine hundred and six per cent (906%). In the nine years, from 1989 to 1998, the increases amounted to $59,000.00, or two hundred and twenty-seven percent (227%). Increases of astronomical amounts like this, when made by ordinary business people, ordinary mortals, would require justification. It is our opinion that these increases also require plausible, realistic explanation, support and justification when made by bureaucrats. Especially in view of the fact that, in the same period, the CPI/inflation rate has increased by a figure in the region of two hundred and twelve per cent (212%)." This is a schedule setting out the unimproved value applied to the subject land and the percentage increases in the valuation of it from 1983 to 1998. I have already commented that this type of evidence is not helpful to the appellants. Page 3, paragraphs 3, 4, 5, 6, 7 and 8 – "3. In 1989 the real estate valuation for our property (land and house) was $170,000.00 asking price, negotiable to about $165,000.00. Today, the market value -- 3 of 7 -- 4 for our property is $160,000, with a negotiable real price of around $145,000.00, based on sales of other dwellings made in the area, the same street, over the past year or two. This is also supported by the Courier-Mail newspaper articles of 7 August 1998, attached to this submission as an annex. 4. The insurance valuation for the house (building) is presently $136,000.00, replacement cost, supported by the insurance company's document, also attached to this submission. The market value for the house plus land is approximately $145,000.00. That means the value of the land should be more in the region of $9,000.00. We bought this property (house plus land) in 1983 for $66,000.00. The land valuation for 1982 to 1986 was $8,450.00, which left us with the $57,550 as replacement value for the house (building without contents) which was a realistic division of the total value. 5. If we are to take the Department of Natural Resources valuation of the land as fact rather than fiction, a mere arbitrary figure plucked out of the air to suit the increased spending of (in particular) Lady Mayor Sally-Anne Atkinson, who was at the time of the 207% increase travelling the world, ostensibly to try to get the 1988 Olympic Games for Brisbane, the real value of replacement for the house (building) is reduced to a mere $51,000.00, much less than the replacement value in 1982/86. Documentary evidence of the building insured value is attached as an annex. 6. This means, of course, that the land valuation is so highly inflated as to have gone beyond the realms of reality. So extremely inflated by the Department of Natural Resources, in fact, that if ordinary business people tried on something like this they would find themselves a laughing stock. The Department of Natural Resources staffed by serious-minded executives with a finger on the pulse of financial reality? Never! 7. We, therefore, are seeking a revaluation downwards to, at the very least, that of 1990, $44,000.00. Even this results in an extremely over-valued, "unimproved value" for a piece of land. It leaves the house value at about $100,000 when taken together, and even the insurance company puts a value on the 12 Balloch Street house of $136,000. In all probability, a class action could be brought by rate payers of this city against arbitrary and unjustified increases imposed by the Department of Natural Resources. The rate paying citizens of this city would, we think, stand a fair chance of success. With this in mind, we can see no reason why we should not go public, in due course, with these arguments. 8. The reasons for the sudden increase in value from $8,450.00 to $26,000.00 from 1986 to 1987 respectively will have to be explained in detail. This information should be freely available from the Department of Natural Resources working files under the Freedom of Information Act. We expect this information to be forthcoming and require the Chief Executive of the Department of Natural Resources to make available, unedited, the files relating to this increase to The Court, so we may try to ascertain the basis upon which these enormous increases were made." Again I consider this segment of Mr D'Ath's statement not to be of assistance -- 4 of 7 -- 5 to me in determining the unimproved value of the subject land. Reference to real estate valuations for properties adjusted for the insurance values for houses etc to determine unimproved value has no place in valuation practice when the determination of unimproved value is under consideration. It is akin to using sales of improved properties as a basis for the determination of unimproved value, and again the Land Appeal Court and this Court has often been commented that the best basis of valuation is the use of vacant or lightly-improved sales evidence. Page 5, paragraphs 15, 16 and 17 – "15. There are great discrepancies between the pamphlets Valuation: Information About … of 1998 and 1999. 16. 1998, under "How your property valuation is established" reads:  Valuations are made on an unimproved basis which is generally the market value of the land assuming that the improvements on the land do not exist.  Sales of comparable properties are used as a guide to determine market value.  In the absence of unimproved land sales, unimproved values are established by deducting the added value of the improvements from the sale price of improved land. 17. How very different is the wording of the similarly titled document of 1999. Instead of running to three short, bulleted sentences like the 1998 paper, 1999 has seven paragraphs explaining the same Valuation of Land Act 1944. The opening sentence is a revelation of bureaucratic double-talk (and very likely double-think, of the Orwellian variety.) Some of it goes:  Statutory valuations are made on an unimproved basis, which is generally the market value of the land assuming that the improvements on the land do not exist.  The property sales are analysed by deducting the added value of the improvements from the sale price of improved land. These improvements may include; the depreciated value of structures, land clearing or filling. The added value of the improvements in not necessarily the replacement cost.  Market movement in overall land values is derived from comparing the analysed unimproved values.  This analysed market movement is applied to current unimproved values and results in existing values being confirmed, increased or decreased. " This material is merely an extract from documents published by the Department for the information of the public. No comment by me is necessary. Page 6, paragraphs 21 and 22 – "21. Yes, there is a mechanism to enable ratepayers to appeal the valuations made on the unimproved-improved value of their land but the mechanism is like a -- 5 of 7 -- 6 steeplechase or a hurdle race. It is so cumbersome and labyrinthine, so loaded to protect a few bureaucrats and politicians and their friends, that an entire street of people who wanted to object (and their friends, that an entire street of people who wanted to object (and quite justifiably so!) to arbitrary land valuation increases in 1998 gave up in frustration and disgust. After tripping at the first hurdle in most cases. We have Greek neighbours. They agreed with the public-spirited person who began the general Notice of Objection movement in Balloch Street but they couldn't read or write English well enough to complete the forms and write the letters. No problem. We did this for them – until the Greek couple, and everyone else in the street, lost interest, because they could not manipulate the cumbersome, obstructive system of appeal. They got lost in the labyrinth of bureaucratic humbug, as intended they should by the Department of Natural Resources. 22. We do not think this system happens by accident and we believe that the results (the 'outcome' as current bureaucratic jargon would put it) confirm this opinion to the point that it goes beyond mere opinion and makes it empirical evidence. No, not anecdotal evidence, empirical evidence. Why should we judge the Department of Natural Resources by what they say, rather than by what they do? We think the system of appeal is cumbersome, confusing and obstructive for the very purpose of allowing the Department of Natural Resources to get away with high-handed, boarder-line corrupt practices and to evade being answerable to the public – the general public, that is, not minority special interest groups that get favourable treatment – of Queensland." I am at a loss to understand why Mr Paterson did not seek to have these paragraphs also struck out. They are of no relevance. Page 8, paragraph 30 – "30. To support our claim for a reduction in the unimproved value of our land to the 1990 figure we would respectively ask The Court, that our request for access to the Department of Natural Resources' working files be ordered, under the rules of The Freedom of Information Act. In particular, to the files dealing with events concerning the revaluations around the years 1985 – 1987, and 1989 – 1993, to enable us to examine and assess the manner in which the Department administers The Valuation of Land Act 1944." This Court has no power to order the production of the Department of Natural Resources working files under the rules of the Freedom of Information Act. For the respondent Chief Executive, Mr Paterson elected, not surprisingly, not to call evidence on the basis that the appellants did not raise a case for the respondent to answer. He cited the provisions of section 33 of the Valuation of Land Act 1944 which are: "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 -- 6 of 7 -- 7 shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered." Mr Paterson cited in support of the adoption of this section the judgment of Mr Justice Gibbs in Re: Brisbane City Council v. The Valuer-General (High Court of Australia)(1978) 5 QLCR 283. Finally Mr Paterson urged the Court to find that the onus resting upon the appellants under the provisions of section 45(4) of the Valuation of Land Act had not been discharged. I have no hesitation in adopting Mr Paterson's submissions. Further, based on my earlier comments on the evidence produced by Mr D'Ath, I certainly agree that the appellants have not discharged the onus resting upon them. It follows then that the appeal be dismissed, and that the unimproved value of Lot 38 on RP99715, Parish of Bulimba, be determined in the sum of Eighty-Three Thousand Dollars ($83,000). CH CARTER MEMBER OF THE LAND COURT -- 7 of 7 --