Estate of Bressow (Deceased) v Chief Executive, Department of Natural Resources [1999] QLC 135 (1999) 22 QLCR 1

LAND COURT BRISBANE 23 DECEMBER 1999 Re: Appeal against Annual Valuation Valuation of Land Act 1944 Valuation Roll No: 623 Local Government: BCC-Hamilton (AV98-593) Estate of LV Bressow (Deceased) v. Chief Executive, Department of Natural Resources D E C I S I O N Background: This matter deals with land at 56 Windermere Road, Hamilton, and described as Lots 9 and 10 on RP 46719, Parish of Toombul. The land has an area of 2,039 m² and is located at the corner of Windermere Road and Dennison Street, Hamilton, and has good access to both streets which are bitumen sealed with concrete kerbing and channelling. Vehicular access to the subject land is via Dennison Street as there is a retaining wall (about 1.5 metres high) along the southern boundary fronting Windermere Road, which is above the subject land. The subject land falls from south to north, and all normal utility services are available. The land is zoned "Residential A" under the Brisbane Town Plan of 1987, and current at the date of valuation of 1 October 1997. The key issues are the comparison of comparable sales, relativity, the impact of a Vegetation Protection Order, and the effective use of the land. At the commencement of the hearing evidence was supplied that the subject land has since passed into the ownership of Roma Janice Morris on 9 December 1998. Mrs Morris is the daughter of LV Bressow, and now continues the appeal under s.46(2) of the Valuation of Land Act 1944 (the Act). Accordingly, Roma Janice Morris is now taken to be the appellant in this matter. On 9 March 1998 the Chief Executive issued a valuation of the subject land at $700,000. Following an objection, the Chief Executive confirmed that figure on 25 August 1998. The appellant has now appealed that unimproved value, claiming it should more properly be $475,000. During the hearing the appellant sought leave to amend her estimate of the unimproved value to $500,000. [1999] QLC 135 -- 1 of 21 -- 2 Mr C Hughes of Counsel, instructed by Stephen Russell & Co, Solicitors, appeared for the appellant, calling evidence from Matthew Mark Kay, a town planning consultant, Norman Bruce Blocksidge, a registered valuer and real estate agent and Graham Oriel Morris. Mr J O'Rourke, Legal Officer, appeared for the respondent, calling evidence from Leslie William Hillhouse, an ecologist and landscape architect, and James Thomas Houghton, the departmental registered valuer responsible for determining the valuation. The Evidence: (1) The Nature of the Land – The subject land comprises two separate lots which together have a width of approximately 30 metres at its southern end fronting Windermere Road, and approximately 28 metres at its northern boundary. The subject land is about 69 metres in depth from south to north. The eastern boundary of Lot 10 is partly irregular in shape. There is a registered drainage easement in favour of the Brisbane City Council along the northern boundary (Resub A) which has a width of 2 metres, and covers approximately 56 m² of the subject land. It is agreed by both parties that the drainage easement has little impact upon the value of the subject land. Any detriment of the easement would be minimised, as building setback requirements dictate clearance anyhow of 1.5 metres from the boundary, and the impact of a large fig tree would subsume any burden of the drainage easement. The subject land is an elevated parcel with good drainage, however, views to the north are obstructed by a large fig tree with wide canopy spread of approximately 21 metres. The tree is located on the northern boundary and has an extensive partly exposed buttress root structure, which also extends across into the adjoining lands to the north of the subject land (Easement B of Lot 5 on RP 162846). The fig tree is protected by a Vegetation Protection Order (VPO) discussed later. The appellant argues that another impact of the large fig tree is that it restricts the prevailing north-easterly breezes which would otherwise benefit the land. In addition, the appellant claims that the large fig tree is a constant detriment to the subject land in that it attracts bats in fruiting season, which are a constant nuisance from noise, smells and droppings, and there is the further expense in having to remove large amounts of fallen leaves from the tree. -- 2 of 21 -- 3 (2) The Vegetation Protection Order – As noted, the large fig tree along the northern boundary is protected by VPO 137FICVIR04, which was formally declared by the Brisbane City Council on 17 February 1997. As a consequence of the VPO, the Council allows an annual rebate of $30 in the rates in accordance with its current bushland preservation levy policy. Prior to February 1997 the fig tree had been subject to an interim VPO since 11 November 1996. The VPO is designed to protect the very old large tree (Ficus Virens-Sublanceolata – White Fig) which is seen to provide an outstanding contribution to the visual amenity of the locality. The White Fig tree is a very large intact specimen, possibly dating back to the late Nineteenth Century, and reflecting something of the character of the original estate in that area. The tree has a height of 25 metres, a canopy width of 21 metres, and has a trunk of 3 metres width at breast height. The tree is in good health and with excellent vigour. The tree is seen by the Brisbane City Council (the Council) as being "an important cultural relic of the grand estates which formerly occurred in this area". The tree is seen as having outstanding form, and providing a landmark visual backdrop to the area. The tree's canopy extends across much of the northern part of the subject land, and there are signs of the root structure extending across almost to the existing dwelling on the subject land, which is about 21 metres from the northern boundary. The canopy also extends approximately over part of Dennison Street, and up to 9.5 metres from the existing dwelling. It is also noted that the VPO issued in respect of a single tree specimen, and not in respect of a group of trees. At the time of the interim VPO the appellant objected the order claiming, among others, that the tree constituted a serious problem and burden to the owner, the tree roots caused damage to the property, and the tree encourages fruit bats which, in turn, cause a detriment to the property. The Council at that time took on notice, following an on-site inspection, that the appellant appeared to value the presence of the old tree, and did not appear to want to remove it. The strong recommendation of the Council's ecologist (Mr LW Hillhouse) was that the tree be protected for the reasons explained. The impact of a VPO is that the tree specified in the order is protected from any interference, even by the owner, and the management of the tree is outlined in Council Ordinance Chapter 22. Indeed, in that chapter are constraints placed upon the tree as specified (s. 23); how any application to interfere with the tree should be made -- 3 of 21 -- 4 to the Council (s.25); the powers of the Council to decide on any application (s.27); and penalties for breaches of the VPO (s.35). The Council may seek advice from an advisory committee in respect of an application under a VPO, but it is not bound by that advice. The Council is also freed of any claim for compensation as a result of the VPO under s.38 of Chapter 22. While there is no specific power under Chapter 22 for an owner to seek redress of their complaints in respect of the VPO, it may follow that there could be some overall right of appeal under s.4.1.27(1) of the Integrated Planning Act, but only where any VPO impacts a development application. However, for the purposes of this matter, any impact of the VPO upon the mind of a prudent purchaser wishing to purchase the subject land, should be weighed in any consideration of the unimproved value of the land. Mr Hughes argues that the VPO on the large fig tree upon the subject land is seen to have a high aesthetic value for the locality, and because it is a single specimen of cultural or heritage value, then it is most unlikely that the Council would be prepared to relax any controls under the VPO. It is noted that under s.23(2)(b) that as the subject land has an area greater than 2,000 m², the fig tree may be pruned back, but only where it is within 6 metres of the existing building, and only with the approval of the Council. Mr Hillhouse confirms that in his role as an ecologist for the Council, he was unlikely to recommend any major interference with the tree. Mr Kay also argues that the presence of the fig tree virtually destroys any potential for further subdivision of the subject land by virtue of its protection under the VPO. It was Mr Kay's evidence that, in his opinion, had the tree not been located upon the subject land, there was potential to reconfigure the land into three lots, allowing for the existing dwelling, or into five lots if the subject land was considered in its unimproved state. Mr Kay also confirms that with VPO's over individual trees of some significance, in his opinion, unless the tree was found to be unhealthy, then Council was not likely to support any application to remove the tree. Mr Kay also saw the presence of the large fig tree, with its very wide canopy and root structure, as a severe restriction upon the effective use of the land, particularly for the provision of ancillary uses to an expensive home such as domestic outbuildings, tennis court or swimming pool. Mr Houghton disagrees that the large fig tree is a major disability to the subject land, relying also upon Mr Hillhouse's opinion that the tree provides an important street-scape value to the area, and is a backdrop to the existing house. Mr -- 4 of 21 -- 5 Houghton notes that the VPO also impacts the adjoining properties (Lots 6 and 7 on RP 150455 and Lot 5 on RP 162846). He notes that a new dwelling has been erected upon 9 Dennison Street (Lot 6 on RP 150455), however, Mr Morris confirms that new dwelling was constructed prior to the creation of the interim VPO in November 1996. Mr Hillhouse confirms that the large fig tree is a White Fig, which is not very common in cultivation, unlike the more common "Benjaminis" Figs which have a weeping habit. Mr Hillhouse advises that the White Fig is deciduous, and drops all of its leaves once a year, generally over a three-week period in August. For that reason Mr Hillhouse believes that the nuisance of the falling leaves, and bats during fruiting season, can be overstated. In Mr Hillhouse's opinion, as a specialist in landscape architecture, the fig tree would be seen as a desirable attribute of the land, particularly by people with an interest in gardening. Mr Hillhouse notes the current use of the area beneath the fig tree canopy for less formal type plantings, which he sees as providing a whole range of landscape opportunities. It is also noted that there is an existing small swimming pool located immediately to the north of the existing dwelling. Mr Hillhouse also believes that it would not be impossible to construct a tennis court under the canopy of the fig tree, suggesting that care would need to be taken to avoid damage to, and from, the tree's root structure, although he admits that a full sized tennis court might be fairly difficult to construct, while also protecting the fig tree. Mr Hillhouse also sees some cracks in the adjoining driveway to Lots 5 and 7 as not of any public nuisance, and therefore, presumably, not a matter to further impact the value of those properties. Mr Hillhouse believes that damage to structures from the root structure of the fig tree can be overcome by suitable design and construction techniques. He equates the relative life expectancy of the tree (150 years) to certain more temporary structures such as fences (15 years), noting the greater relative significance of the tree. Mr Hughes argues that Mr Hillhouse's understanding of the marketplace perception of the impact of the VPO, would be biased in terms of the value of the tree. Mr Hughes argues that many purchasers were likely to see the VPO as providing some restriction upon their future development use of the land, and were likely therefore to reduce the value seen in the land as a site for a prestigious dwelling. Mr Hughes notes that the lifestyle sought by people who can afford a very high quality home site, were also buying a lifestyle environment, which was likely to require the use of a swimming pool and tennis court, etc. Mr Hughes challenges that Mr -- 5 of 21 -- 6 Hillhouse's opinion in respect of the VPO would reflect the wider community view in the marketplace. However, Mr Hughes concedes that there would be a diversity of such views, and some people might see the tree as an attribute. However, Mr Hughes reminds the Court that while the appellant did not want the tree to be removed, she also did not want the restriction of the VPO. Mr Hillhouse also confirms that the Council is not liable for any compensation as a result of a VPO being placed upon the land, as Council does not believe that the VPO affects the value of the land. However, he was not aware of whether there had been any challenges as to whether the value of the land had been impacted. To assist the Court, Mr O'Rourke refers me to the decisions of this Court in T and GW Shirley v. Chief Executive, Department of Lands (1994-95) 15 QLCR 77; Willsford Pty Ltd v. Chief Executive, Department of Lands (AV94-36), 27 October 1995, unreported; Augur Holdings Pty Ltd v. Chief Executive, Department of Lands (AV93-531), 8 October 1993, unreported; and PL, BD and SP Mitchell v. Chief Executive, Department of Lands (V93-699 and V94-582), 29 June 1995, unreported, all discussed later. (3) Loss of Further Development Potential – In assessing the impact of the VPO, Mr Kay concludes that the restrictions imposed upon the subject land would reduce any possible further subdivision into only two or three new lots. He notes the current policy of the Council in respect of small lot houses (Exhibit 18), which, in his opinion, could have provided up to five new lots. While he accepts that the current Planning Policy No. 7.29 has had the force of law only since 1 March 1999; and s.20.2 of the Town Plan in respect of minimum areas was amended on 15 May 1998, he argues that similar provisions were in force since October 1992. Mr Houghton argues that it is not relevant in this issue to consider whether the development potential has been impacted, because he has valued the subject land under the provisions of s.17 of the Act, which directs that any potential for higher use or subdivision is to be ignored in determining the unimproved value. The only relevance then of considering any lesser future potential use of the subject land, would appear to lie in Mr Blocksidge getting some assistance in assessing, if any, the impact of the VPO upon the unimproved value of the land. In that respect Mr Blocksidge sought assistance from the potential sale of a five-lot new subdivision of a parcel (Lot 4 on RP 162846) about 50 metres east of the subject land. Each of those five new parcels will have an area about 500 m², which he -- 6 of 21 -- 7 estimates to sell for between $200,000 and $250,000 each. Mr Blocksidge has concluded comparable areas of the subject land would be covered by the fig tree canopy. He is aware that the owner still retains ownership of that area under the tree canopy, but estimates that 50% of the value would be lost as a result of the impact of the tree, concluding a loss of $100,000 as a result of the fig tree. Mr Blocksidge in his estimate of $200,000 to $250,000 for a 500 m² parcel bases that conclusion on the following vacant land sales:  Sale 1 – (Cnr Massey and Bale Streets – new Lots 24, 25, 26 and 27). The three smaller lots (511 m²) sold for $220,000 and the larger corner lot (822 m²) sold for $350,000. The overall vacant site (2,357 m²) sold as a development parcel in May 1996 for $980,000. Mr Houghton was aware of that sale but did not use it because it was purchased for redevelopment purposes.  Sale 2 – (15 Morgan Street – area 1,727 m²). This sold in March 1997 for $380,000, and had an unimproved capital value at 30 June 1999 of $440,000 (or $255 per m²). Mr Blocksidge sees that land with its better views as superior to the subject land; although the sale also reflected the need for some later underpinning of a rock face at the rear of the sale, and a major sewerage cost to be provided later. Mr Blocksidge compares those two sales only to seek to determine the value lost by the VPO, and draws no direct comparison to the subject land from those two sales. Mr Houghton argues that Sale 2 was the subject of selective acceptance of a suitable purchaser by the vendor and should be treated with caution for that reason. In respect of the subject land, Mr Kay also notes that there is also a shadow created by the fig tree which limits the solar aspects best suited to take advantage of the location of any building. Mr Blocksidge further notes the restrictions imposed upon gardening under the tree canopy due to the shadow of the tree. Mr Blocksidge confirms that gardening is highly prized in the Hamilton area, but offers no comment to counter Mr Hillhouse's claim that the existing shade tolerance species currently thriving in that shade area are an attractive feature of the current landscape. (4) The Effective Use of the Land – The subject land has a larger than normal area (2,039 m²), and is located in a premium locality where prestigious homes have existed for many years. There is a continuing demand for prestigious dwellings in that locality, even to the extent that quite large, but older homes, are being demolished or removed to allow for the construction of what might be referred to as very upmarket residences. -- 7 of 21 -- 8 The quality of those living areas tends to display a lifestyle well above the average dwelling in Brisbane, and the enjoyment of those living areas tends to display quite expensive swimming pools, tennis courts and other landscaping arrangements. The location of a tennis court would normally be readily accommodated within an area of 2,039 m², allowing for the preferred north/south orientation. A large prestigious dwelling, and a large upmarket swimming pool could also be designed within such an area in order to maximise the use of the land. However, any restriction upon the location of those facilities must, depending upon its size, impact the flexibility afforded the owner. Such matters would inevitably be taken into consideration by a prudent purchaser contemplating acquiring the land. Any overhanging of such areas by a large tree canopy, and any undue shade, and consequential dampness to the tennis court, would become areas of concern. The question to be asked is how might those concerns manifest themselves in the marketplace? (5) Relativity with Adjacent Lands – In seeking relativity with adjacent lands, Mr Blocksidge draws comparisons with the unimproved capital values (UCV) of the following improved properties: Property Address Area UCV $ per m² Remarks 1 109 Anthony Street 2,939 m² $520,000 $176.93 Inferior 2 14 Sutherland Avenue 4,664 m² $1,450,000 $310.89 Superior 3 157 Yabba Street 1,942 m² $350,000 $180.22 Inferior 4 40 Mullens Street 2,435 m² $850,000 $349.00 Superior 5 66 Eldernell Terrace 2,200 m² $750,000 $340.00 Superior From those comparisons Mr Blocksidge concludes a rate for the subject land at $295 per m², and an unimproved value of $600,000, free of any detriment of the VPO. Mr Blocksidge argues that views from Property 4 (40 Mullens Street) are spectacular, extending downstream from the mouth of the Brisbane River, and upstream to Newstead Park. He further argues that the use of Property 5 (66 Eldernell Terrace) is far superior to the subject, as is also the almost 360º commanding views from that parcel. Property 5 is practically level, and has an existing north/south tennis court. While Mr Blocksidge was uncertain about the unimproved value of Property 5 at the relevant date of 1 October 1997, he understood that the level of value had remained constant from the succeeding value after the one at 1 January 1996 (effective at 30 June 1996). In comparing the lack of views from the subject land, Mr -- 8 of 21 -- 9 Blocksidge argues that the unimproved value for the subject land at $700,000 does not reflect an appropriate relativity with Property 5. Mr Blocksidge concedes that his Property 2 (14 Sutherland Street) is a much larger parcel, but argues that for residential areas greater than 2,000 m² in that locality, in his opinion, additional area does not seem to add much per m² to the value of the land as a homesite. However, he also argues that if the parcel is much smaller in area than 2,000 m², then there can be a dramatic change in the rate per m² for much smaller parcels. Mr Blocksidge had not checked to confirm whether there were any heritage orders current in respect of any of those five properties. Mr Houghton agrees with Mr Blocksidge's overall comparisons of his five properties, but argues that it is not appropriate to compare residential sites on a per m² basis, and he relies on a direct comparison basis with sales of vacant lands, or lands where a former building has been removed and a new single dwelling constructed. Mr Houghton argues that a per m² basis does not allow for variations in the sites such as shape, size, frontage, access, fill, topography, slope, etc., and seeks support for his approach in precedents of the Courts. Mr Houghton also notes that Mr Blocksidge's Property 2 (14 Sutherland Avenue – "Windermere") is a heritage listed property, which reflects some reduction for the more constrained land use entitlements of such a parcel. Mr Houghton also notes a similar heritage character listing for Property 4 (40 Mullens Street – "Cremorne"). Property 4 also has some major terraced improvements reflected in the unimproved value, and it adjoins a Council depot on its eastern boundary, and is impacted by traffic noise from Kingsford Smith Drive. Mr Houghton further advises that the correct unimproved value of Property 5 (66 Eldernell Terrace) was really $950,000 at 1 October 1996, and not $750,000 as assumed by Mr Blocksidge. Mr Houghton advises that the correct unimproved value of Property 5 at 1 January 1996 was $750,000. The confusion associated with the relevant unimproved value to be compared appears to arise from a departmental advice which shows the sales information of that property. The unimproved value at the date of sale of Property 5 reflected, on Mr Houghton's advice, the level of value determined from sales some time prior to the then valuation. (6) Comparison of Sales – To support his valuation Mr Houghton relies upon the following sales of "Residential A" vacant lands, or where an old building has been removed to make way for a new single residence: -- 9 of 21 -- 10  Sale 1 – (1 Palm Avenue, Ascot – Lots 1 and 2 on RP 33919). This is a 2,544 m² parcel at the corner of Palm Avenue and Alexandra Road. The sale is seen as far superior to the subject land. The sale sold in July 1996 for $1,150,000 which, after allowing for improvements, and the further cost of removing the old dwelling ($15,000), was analysed at $1,150,000, and applied at $950,000. Mr Houghton notes that at the date of the sale the unimproved value of Sale 1 had been $550,000 as at 1 January 1996. Because of the sale itself, that land then was increased to $950,000 at the next valuation of 1 October 1996.  Sale 2 – (33 Bennison Street, Ascot – Lots 44 and 46 on RP 33915 and Lots 1 and 2 on RP 41749). This is a 1,214 m² inside parcel with similar outlook. The sale is seen as inferior to the subject land due to size, outlook, and inside location. The sale sold for $735,000 which, after allowing for improvements and the removal of the old dwelling, was analysed at $710,000, and applied at $660,000. Although Sale 2 was a related party sale, a full analysis of that sale indicated that the purchaser paid full market price.  Sale 3 – (2 Florence Street, Clayfield – Lots 1 and 2 on RP 158189). This is a 1,610 m² corner parcel in a quality locality, which is seen as slightly inferior due to its smaller size. The sale sold in January 1997 for $850,000 which, after allowing for improvements and the removal of an old dwelling, was analysed at $795,000 and applied at $675,000, after allowing for the impact of a natural spring upon the land ($25,000), which had been unknown to the purchaser at the time of sale.  Sale 4 – (56 Langside Road, Hamilton – Lots 1 and 2 on RP 94898). This is a 1,631 m² inside elevated parcel in a narrow street. Access to the sale is difficult due to the steepness of the parcel which falls towards Langside Road, which has restricted parking. The sale is seen as inferior due to size and difficult access. The sale sold in January 1997 for $750,000 which, after allowing for improvements and the removal of an old dwelling, was analysed at $710,000, and applied at $620,000. Mr Houghton further argues that the unimproved value of the subject land had remained constant at $700,000 for both the 1 October 1996 and the 1 October 1997 valuations. Mr Houghton notes that had he not had more recent sales to support the current valuations, he could also have relied upon a further sale at Adelaide Street East which was an older sale, had an area of 2,200 m² and sold in 1996 for $1,050,000, and has been applied at $900,000. Mr Houghton saw that sale as superior to the subject land. -- 10 of 21 -- 11 Mr Houghton also notes a recent sale, after the relevant period, of land at 68 Windermere Road (Lot 4) which had formerly failed to sell at $700,000, but has since sold for $1,026,000. However, because of its later date of sale, Mr Houghton does not rely on that sale in the current matter, other than to note that it supports his valuation. However, as noted previously, that recent sale had been for subdivisional development purposes, and it is not a reasonable comparison on a site basis for a single residence. Decision: (i) The Method of Valuation – I turn first to the methods adopted by the parties and note that both valuers sought to compare sales of vacant lands if they were available. However, because of the paucity of vacant lands in the locality, and relying upon the records of the respondent, Mr Blocksidge sought to rely upon relativities with a range of improved parcels of comparable size and amenity. Mr Houghton relies upon sales of improved parcels which were purchased for the express purpose of removing the old dwelling, and the subsequent erection of a new single residence. It is Mr Blocksidge's opinion that purchasers of large parcels in the Ascot/Hamilton area compete in the marketplace with developers who intend to further subdivide the land in the immediate future. Mr Blocksidge argues that because of this need to compete with users for development purposes, it is reasonable to conclude that even purchasers for single residence purposes would also be considering the future potential to subdivide the land at a later time. Mr Blocksidge notes that it is not uncommon for people to use a large parcel for a tennis court while children are young, and then to later subdivide the land and sell off that part of the land. On that basis he sees the realising of some future subdivisional potential as merely only a matter of a difference in timing between the developer and a single residence owner. Mr Blocksidge also notes that the respondent has valued the subject land under s.17 of the Act for the purpose of a single dwelling house. In that respect I note that s.17 states: "17(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made." -- 11 of 21 -- 12 Clearly for the purpose of this valuation, Mr Houghton has had to ignore any enhancement of the value of the land which might be associated with subdivisional development potential. It is Mr Blocksidge's opinion that it is therefore inconsistent with s.17 for the respondent to seek comparisons with lands where the subdivisional development potential is part of the market attractiveness of those parcels. While it is true that both developers and single dwelling purchasers compete in a single market for parcels of area comparable to the subject land, that does not mean that both types of purchasers see the same potential in the land. Indeed, any prudent purchaser of land, should also consider the long-term prospect of disposing of the parcel should personal circumstances dictate. In those circumstances the single residence owner might perceive a future sale of part of the land. However, for the purposes of an annual valuation of land there is conclusive evidence that the site is to be used for a s.17 purpose, when the owner in fact does set out to construct a new single residence building. If that owner, at a later date, moves to further subdivide part of the land not encumbered by the new residence, I am sure that the resulting separate parcels would then attract individual valuations. On the basis of the above conclusions I believe that in the marketplace, where further subdivisional development is possible under the Town Plan, then both developers and single dwelling owners must compete for the available properties for sale. As a general rule, where land values are less prestigious, it is likely that the higher financial resources of the developer will ensure that he is successful in acquiring the land. Indeed, that is now quite common in many inner suburban areas where communities are now experiencing redevelopment of smaller parcels, not always to the satisfaction of adjoining long-term residents. However, in more prestigious localities, such as Ascot and Hamilton, the purchasing power of the more affluent potential purchasers may exceed the resources of the developer. In those circumstances, it is the developer who must compete with the single dwelling owner. As market forces constantly demonstrate, the price of scarce resources, including prime land, art, and other items of quality, often exceed the resources of the general community. In such matters it is always the buyer with the most desire to acquire the item, and the capacity to pay for it, who is successful in ownership. I see such a scenario in the locality of the subject land. If I then turn to Mr Blocksidge's comparisons of relativities with adjacent similar improved lands, I note that he has sought to compare those items on a rate per -- 12 of 21 -- 13 m² basis. In seeking guidance on such an approach when determining the unimproved value of residential lands, I note the decision in Hans and Else Grahn v. The Valuer- General (1992-93) 14 QLCR 327, where the Land Appeal Court said at p.330: " The appellants fail on this point because the appropriate basis for the valuation of a residential lot is not the application of a rate per square metre but an assessment of the unimproved value of each lot as land used for single unit residential purposes. As the Land Appeal Court said in its decision on the appellants' previous appeal (H and E Grahn v The Valuer-General, AV89-246 and 247, 13 December 1990): 'for the purpose of valuing residential sites, the preferable method of comparison is on a site to site basis and not on the basis of a unit area valued comparison. Site for site comparison should take into comparison such matters as the size of the lots, the situation of and access to the lots, the shape and topography of the lots etc and comparisons on a unit area basis do not necessarily reflect valuation considerations for the above features.'" I note also that, having considered guidance from precedents to be found in WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44, the Land Appeal Court in Grahn said at p.329: "Bearing those propositions in mind, it is best to approach this case by considering first the position regarding sales evidence then considering the relativity of the valuations of the subject blocks with the valuations of comparable blocks of land." I note also that while comparable lands should bear proper relativity, one to another, the valuations so compared should be soundly based. That principle was followed in R and MM Barnwell v. The Valuer-General (1990-91) 13 QLCR 13, where the Land Appeal Court said at p.16: "We are conscious that it is desirable that valuations made for the purposes of the Valuation of Land Act of comparable lands should bear proper relativity, one to the other, if the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis." In considering the use of relativity in preference to the evidence of comparable sales, the Land Appeal Court in WM and TJ Fischer v. The Valuer-General (supra) 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. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence." -- 13 of 21 -- 14 Mr O'Rourke has also drawn my attention to the findings of LR and MM Bignell v. Chief Executive, Department of Lands (V92-65), 4 March 1996, unreported, where the Land Appeal Court said at p.20: " This is a case which can be described as one in which the use of the principle of the relativity of similar neighbouring blocks should not be preferred to the exclusion of relevant (if not ideal) sales evidence. It is a case in which it is preferable to correct an inaccuracy with respect to the subject land rather than to make an inaccurate assessment in order to secure uniform error." That matter followed guidance from Barnwell and Grahn, and in the circumstances of the relativities compared, has some analogy with the current matter. In Bignell the respondent had deliberately changed the former relativities between the properties, but had done so only as a consequence of a proper valuation of the subject land. The Land Appeal Court noted at p.11 "What has to be decided in this case is the proper value of the subject land by reference to sales evidence about comparable unimproved properties. We agree. If a proper valuation of the subject land makes it inconsistent with the relative values of neighbouring blocks then so be it. The question before this Court is 'the correct valuation of the subject land, not the correct valuation of an area'." In the current matter Mr Houghton has determined the unimproved value of the subject land, and the comparable relativities with Mr Blocksidge's Parcels 1 to 5, even if they are comparable on a site basis and not on a per m² basis, should be seen as secondary to the direct sales comparison method. (ii) Comparison of Sales – In drawing his comparisons with the sales supplied, Mr Houghton has found: Sale Applied Unimproved Value Comparison 1 $950,000 Far superior 2 $660,000 Inferior 3 $675,000 Slightly inferior 4 $620,000 Inferior Mr Blocksidge provides no sales of comparable properties for direct comparison. On that basis I can accept that the unimproved value of the subject land, as a site unaffected by a VPO, would be appropriate at $700,000. In seeking understanding of the correct applied unimproved value of Sale 1 (1 Palm Avenue) at the relevant date of 1 October 1997, I note the process of annual valuations during the last few years. The process of annual valuations requires under -- 14 of 21 -- 15 s.37(3) that the Chief Executive fix a date at which all lands in selected areas are to be valued. Historically, the dates of valuation have been determined at: 1 January 1996; 1 October 1996; 1 October 1997; 1 October 1998. The reason for the change from 1 January to 1 October in 1996 was presumably to allow more time for the objection process to be undertaken, and to allow a more appropriate response time to objectors by the Chief Executive prior to the formal date of effect of the valuation, which is 30 June of the particular year. At the 1 January 1996 the unimproved value of Property 5 (66 Eldernell Tce) was $750,000. By 1 October 1996 the unimproved value of Property 5 had increased to $950,000 (Exhibit 28), as a direct result of several significant increased sales in the locality, including Sale 1 (1 Palm Avenue). Sale 1 had a former unimproved value at 1 January 1996 of $550,000, but that increased to $950,000 following the sale of that property on 9 July 1996 for $1,150,000. (Exhibit 29) (iii) Relativity – If I then compare Mr Blocksidge's properties on a site value basis, I find that there is no overall disagreement with Mr Houghton's opinions that Properties 1 and 3 are inferior and Properties 2, 4 and 5 are superior. However, I note that those improved site values are also subject to varying levels of agreed improvements, and certain allowances for heritage listings. On that basis I get little further assistance from the relativities. (iv) The Impact of the Vegetation Protection Order - Before exploring the impact of the VPO upon the value of the subject land, I need to differentiate the actual impact of the fig tree itself. The physical fig tree could be either a detriment or an attractive feature to the land, depending upon the perspective of the owner. It is agreed that there would be some who would identify the tree as an aesthetic ornamental background feature of historic significance. Such people, similar to Mr Hillhouse, are likely to seek to maximise the landscaping attributes of the large shady canopy, in a manner not too dissimilar to the appellant. In an environment where culture and gardening are seen as important features, the fig tree could be seen as an asset. However, there are also likely to be people who have less attraction to the dominating influence of the fig tree, and who would seek to maximise their use of the subject land, perhaps to the peril of the fig tree's existence. As discussed previously, -- 15 of 21 -- 16 in the marketplace both types of owners are likely to occur, although the developers are more likely to predominate in the second category. It is a true statement in such matters that beauty and value lie in the mind of the beholder. If I turn then to the actual VPO itself, as a separate planning mechanism to preserve the fig tree, I note also that it could be seen either as an advantage or a disadvantage to a prudent owner. However, what the VPO does is to shift control of the fig tree from the owner of the land to the Council. As such, it must be seen as lessening the rights of the owner over the fig tree. In cases where the actual owner has sought the protection of a VPO, then the rights of the owner over that tree may even be seen to have been supported by the VPO. However, where the owner has objected against the establishment of the VPO, such as in the current matter, then the owner's rights would appear to have been impacted. However, while it is interesting to speculate upon what might be outcomes that could affect the minds of prudent purchasers, the only evidence to which we should turn is really how the marketplace determines any added value, or detriment, of a VPO upon the land. In that regard I have no evidence of the impact of a VPO in this particular matter. Mr O'Rourke refers me to several matters before this Court where the matter of a VPO has been considered. I note, for instance, in T and GW Shirley v. Chief Executive, Department of Lands (supra) the learned Member noted at p.82: " I accept the argument that the existence of a VPO could affect value, depending on the individual property circumstances. Each case, in effect, would need to be treated on its merits, but even then the argument that diminished value has resulted would require evidentiary proof, ideally obtained from sales evidence of affected property." I note also that in the matter of Augur Holdings Pty Ltd v. Chief Executive, Department of Lands (supra), the President of this Court considered the impact of a VPO, where the owner of a 13 ha site at Enoggera argued that the VPO would influence the mind of a potential purchaser who wished to use the land for purposes requiring the destruction of timber, eg, banana growing. The President, when speaking about the approach of the departmental valuer, said at p.3: "He could not see a VPO affecting the value of the land for the highest and best use for which it has been valued and nor do I." However, that matter can be distinguished as there the basis of valuation was for its highest and best use as a single residential site, and the appellant conceded that the VPO would have no impact upon his use of the site for residential purposes. In -- 16 of 21 -- 17 the current matter Mr Blocksidge seeks to differentiate the residential lifestyle, with its attendant ancillary land uses, of the affluent locality of the subject land. Mr O'Rourke also directs me to the findings of this Court in Mitchell v. Chief Executive, Department of Lands (supra), where, subsequent to an owner purchasing a property in May 1992, a VPO was declared in October 1992 over a White Fig tree located about 12 metres from the rear of a new house, then under construction. The dwelling was modified to accommodate the existence of the VPO, particularly in respect of the deepening of a new sewer line under the roots of the tree, so as to not disturb the roots of the tree. There is a direct analogy with the current matter in so far as the owner in the Mitchell matter also complained of disturbance and nuisance from flying foxes during the fruiting season of the fig tree. While there was no market evidence to indicate what allowance should be made for the impact of the VPO, the learned Member found favour with the Chief Executive's allowance made to a sum of about $2,000 (4%) in the circumstances of that matter. The unimproved value of the land in that case was $50,000 (1992), and the land at Bald Hills had an area of 1,288 m². The difficulties for the owner, as a consequence of the VPO, were identified as the need to apply to the Council to undertake the extra work, and difficulties of coordinating the work with the Council officers, the contractor, and the owner during business hours, and of sterilising the equipment used. Mr Houghton argues that relatively the VPO areas covered were a more significant part of the Mitchell's property, than is affected by the VPO in the current matter. In the matter of Willsford Pty Ltd v. Chief Executive, Department of Lands (supra), I note that in that matter the impact of a VPO was over 70% of the area of an 8.255 ha rural residential parcel at Upper Brookfield. While comparison with other rural residential parcels also impacted by VPOs indicated that there was no depreciatory effect upon the value of the land for rural residential living purposes, it was noted that selective clearing for homesite purposes was permitted by the local authority. The unimproved value of that land in 1992 was $200,000. In view of the much smaller area of the current subject land, and that the VPO in this matter is for a single tree specimen, and not a general clearing order, I get little assistance from that matter. In analysing what impact upon value that a VPO causes to land, I have some empathy with Mr Hughes' observations that the need for proof of diminished value as a consequence of a VPO has yet to be fully documented, as VPO legislation is of -- 17 of 21 -- 18 recent history. In the absence, therefore, of clear guidance in this matter, I note that there is some analogy with the impact of heritage listing of a property. In such cases the owner of the land retains custodianship of the property, including its improvements, but his right to exercise free and unencumbered control of that property is severely restricted. Any changes to a heritage listed property, like the subject of a VPO, is subject to the approval of a public authority, is open for public scrutiny, and is likely to be a very costly exercise. Where an owner personally seeks the protection of a historic listing, or a VPO, then that owner may see some added value in such a restriction. However, where an historic listing is imposed upon the land in the community interest, then I believe there should be some detriment to the value of the land, unless market forces indicate that the scarcity factor relating to the object protected is such as to warrant some added value. The overall impact of a heritage listing upon an old residence in Melton Hill in Townsville was the subject of a decision in GV and DE Roberts v. Chief Executive, Department of Natural Resources (V96-791), 12 August 1998, unreported. In that matter the Land Appeal Court considered the opinion of the valuer that a comparison of directly comparable residential properties would disclose no more, or no less, difference in value, whether one is historically listed or not. The Land Appeal Court said at p.9: " We are not able to accept, however, that there is logic in the opinion that two hypothetically directly comparable residential properties, located in the same environment, one with a heritage listing, and the restrictions on freedom of use and private enjoyment which that entails, would be seen as equally desirable in the marketplace as the other, which could be used and privately enjoyed free of bureaucratic interference and direction. The difficulty is of course the assessment of what the difference in value might be, in the absence of convincing market evidence. A further difficulty is recognised in apportioning loss in value to a heritage listed improved property, between land and improvements." In the circumstances of that case, without the benefit of market evidence to guide them, the Land Appeal Court did the best it could and found at p.10: " Borrowing the words of Devlin J in Biggin v. Purmanite (supra) this is a case where 'the court must do the best it can' and we have decided that, based on an unencumbered valuation of $180,000, an unencumbered value of $160,000, rounded from a discount of 10 per cent, reflects our appreciation of the probable effect of loss of freedom of choice in the use and quiet enjoyment of the land content of 'Warringa'." -- 18 of 21 -- 19 In seeking guidance as to whether an historic listing should be considered when determining the site value of a property, I note that was found to be a matter for consideration in the Supreme Court of South Australia (Land and Valuation Division), where in McEwin & Ors v. Valuer-General (1993) 80 LGERA 12, Mullighan J said at p.18: " True it is the building that has the heritage significance, and not the unimproved land per se, but it would be unreal to ignore the significance of the restrictions caused by the heritage listing when assessing the site value. In view of those restrictions the land will never become vacant land, unless there is some unforeseen disaster which must be ignored for present purposes, and cannot be developed inconsistently with the heritage significance. Consequently, the restrictions caused by the heritage listing must be considered when determining the site value." If I turn then to the impact of the VPO I find that, unless the tree was to be so diseased as to warrant its removal, then the subject land will continue to be encumbered by the presence of the VPO. The problem to be considered, however, is the extent of any such encumbrance upon the value of the land. In the McEwin matter the valuer compared the subject in that matter with eight other sales of properties which were also heritage listed. However, Mullighan J noted at p.21: " The so-called comparable properties were heritage listed, but there the similarity ends. None of them upon redevelopment, renovation or refurbishment would attract the restrictions which would be applied to the Adelaide Club." The message in that point is that each matter needs to be assessed on its individual merits. In the current matter, while Mr Houghton's sales are seen to be comparable, none of them suffer the imposition of a VPO. In the end I must seek to do the best I can with the evidence before me. It is clear that the VPO covers a very large tree with an expanded root structure, in the northern part of the subject land, where overshadowing could cause some loss of amenity. The subject land is in a locality where lifestyle considerations may dictate selective use of major personal recreational facilities such as a tennis court or swimming pool. The nature of the White Fig tree is such that nuisance by bats and their habits could be a problem. In the context of this matter, and in the absence of sales evidence to the contrary, I believe the VPO justifies some reduction in the unimproved value of the subject land. -- 19 of 21 -- 20 In assessing that figure I note that even though the exercise is difficult, precedents direct that proof needs to be determined. That was found in Aerial Advertising Co v. Batchelors Peas Ltd (1938) 2 All ER 788, where Atkinson J said at p.796: " Difficulty of proof does not dispense with necessity of proof." In the absence of proof from other sources, I note guidance is to be found in Biggin & Co Ltd v. Permanite Ltd (1950) 2 All ER 859, where Devlin J said at p.870: " It is only that where precise evidence is obtainable, the court naturally expects to have it. Where it is not, the court must do the best it can." In that matter Devlin J followed guidance from Chaplin v. Hicks [1911] 2 KB 786, where Vaughn Williams LJ said at p.792: " In the case of a breach of a contract for the delivery of goods the damages are usually supplied by the fact of there being a market in which similar goods can be immediately bought, and the difference between the contract price and the price given for the substituted goods in the open market is the measure of damages; that rule has been always recognised. Sometimes, however, there is no market for the particular class of goods; but no-one has ever suggested that, because there is no market, there are no damages. In such a case the jury must do the best they can, and it may be that the amount of their verdict will really be a matter of guesswork. But the fact that damages cannot be assessed with certainty does not relieve the wrong-doer of the necessity of paying damages for his breach of contract." On the evidence before me I have an acceptance by this Court of the impact of a VPO in Mitchell totalling 4% of the unimproved value without a VPO; and the estimate by Mr Blocksidge of the impact of a VPO at 50% of a small parcel ($100,000), which would represent 16.6% of Mr Blocksidge's estimate of the unimproved value of the subject land at $600,000. If I seek guidance from the decision in Roberts in respect of the impact of a heritage listing, I find an allowance by the Land Appeal Court of 10%. If I also compare the fully usable area of Mr Houghton's Sale 3 (1,610 m²), I find that parcel was seen to be slightly inferior to the subject land due to its smaller size. That parcel was applied at an unimproved value of $675,000, due in part to a natural spring upon the land. I believe the area of the subject land that is not physically impacted by the presence of the fig tree, would be about 1,500 m². On that basis, such a slightly smaller area could provide the appellant free and unencumbered rights to develop the lifestyle ancillary uses in keeping with the locality, but would be -- 20 of 21 -- 21 seen as slightly inferior due to its smaller size. In the special circumstances of this matter, I will therefore allow a $50,000 deduction (7%) for the negative impact of the VPO upon the estimated unimproved value as determined by Mr Houghton at $700,000. Summary: The evidence supports that the unimproved value of the subject land in its state without the VPO, as determined by Mr Houghton at $700,000, is reasonable. However, where it is found that the Chief Executive has employed a method that is fundamentally flawed, then the valuation may be set aside. (See Brisbane City Council v. The Valuer-General (1978) 140 CLR 41). On the evidence, I believe Mr Houghton should have allowed a detriment of $50,000 for the impact of the VPO, giving a final unimproved value of $650,000. Conclusion Having considered the whole of the evidence, I am persuaded that the appellant has partly proved her case. The valuation of the Chief Executive is set aside, and the unimproved value of Lots 9 and 10 on RP 46719 is determined at $650,000. NG DIVETT MEMBER OF THE LAND COURT -- 21 of 21 --