Crooke v Chief Executive, Department of Natural Resources [1998] QLC 98

LAND COURT, BRISBANE 11 September 1998 Re: Determination of Unimproved Value - City of Brisbane - Division of Hamilton. (REF. AV97-311). John W Crooke v Chief Executive, Department of Natural Resources D E C I S I O N John Whitehead Crooke has appealed against the determination by the respondent Chief Executive of an unimproved value of $510,000 for a 2023 square metre parcel of “Residential A” zoned land and situated at 5 Mayfield Street, Ascot, and which is more particularly described as Lots 14 and 15 on RP 33587, Parish of Toombul, County of Stanley. The relevant date for the determination of the unimproved value is 1 October 1996, and the appellant contends within the notice of appeal for an unimproved value of $435,000. The notice of appeal was filed by the valuation firm John H Frew Pty Ltd, but Mr Crooke represented himself and provided evidence in support of the appeal. Mr Crooke bases his appeal on the ground of relativity, pointing out that there is a dwelling house on the land which effectively occupies the whole of the frontage of the parcel to Mayfield Street. On this basis, Mr Crooke says that all of the land at the rear of the parcel is, from a valuation point of view, technically worthless. Mr Crooke points out that his land suffers from surface water runoff from a tennis court on Lots 8 and 9 on RP 33587 which lots front Windermere Road and abut the subject property in the south. Mr Crooke has spent time with a building contractor to obtain quotes to construct a rubble drain on his land and to get rid of both underground and surface water. Now as well as that, Mr Crooke points out that at this point in Mayfield Street in front of his property the land is in fact in a cutting which makes his front fence not a front fence but a heavy retaining wall. So in addition to the drainage costs, Mr Crooke says that an allowance has to be made for the construction of a retaining wall when comparing its valuation with the [1998] QLC 98 -- 1 of 6 -- 2 value of other blocks in the street and in the area. But Mr Crooke was not specific about the valuations applied to them. Mr Crooke informed the Court that as a result of previous discussions with a Departmental valuer (Mr Houghton) about the drainage problems and the quotations for the retaining wall and the cost to alleviate surface water problem in 1994, the value of the subject land was then reduced from $410,000 to $380,000, and Mr Crooke feels that a value of $380,000 was a good benchmark valuation at that time. I note that the relevant date for the valuation of $380,000 was 30 June 1993. But soon after, in 1995, the valuation was increased to $435,000, and now to $510,000, and some friends of Mr Crooke’s who live in Mayfield Street have told him that they would not approve of the shifting of the dwelling house, parts of which date back to either 1911 or 1917. So Mr Crooke says he is in an unenviable position of having a large house on a large site in the middle of quite a good street and he can do nothing about the situation especially in terms of exploiting the land at the rear of the dwelling house. Mr Crooke produced in evidence a copy of a letter he received, bearing the Brisbane City Council letterhead dated 29 June 1998, offering the writer’s (Graham Clay - Councillor for Hamilton Ward) opinion that there is a growing community concern about the loss of character of Brisbane suburbs due to the steady removal of some of Brisbane’s most significant buildings. Mr Clay further states in the letter that under the Integrated Planning Act for Houses in a Character Area (such as where the subject property is situated), the consent of Council is required before removal or demolition of buildings can take place. Mr Clay says further that for “timber and tin” houses built prior to 1940, an “impact assessment” is required, and also that given that Mr Crooke’s house is a perfect example of the style of house that Council and community seeks to protect, in his (Mr Clay’s) opinion one which would be most unlikely to receive Council’s approval to remove or demolish. Accordingly, Mr Crooke feels he is “a bit stuck” with a big house which cannot have anything done to it and paying out an outlandish amount of money on repairs and renewals, repainting, etc. I might here comment that Mr Crooke did not ask Mr Clay to come to the Court to support the opinions expressed in his letter. Mr Crooke told us that he has had his property for sale for over twelve months with no result. He has looked at several ways of putting the back of his land to use. One was to take an easement access through neighbouring Lot 2 on RP 41803 which has access to Abbott -- 2 of 6 -- 3 Street, but that is not economically possible because the value of that land is such that the owners want more money ($400,000) than the easement is worth to Mr Crooke. Mr Crooke’s basis for his suggested valuation of $435,000 is to use the Cost Price Index adjustment at the rate of 5 percent per annum to the value of his land at $380,000 fixed in 1994. He told us that a value of $435,000 was advised by Mr Frew of John H Frew & Co, as being sustainable as a reasonable valuation but Mr Frew also was not at Court to assist Mr Crooke with his case. Departmental Registered Valuer James Thomas Houghton has made the valuation the subject of this appeal. Mr Houghton describes the nature of the land as being above road level and in its natural state falling gently from the rear to the street frontage. Mr Houghton says some minor cut to fill has since been carried out on the subject land which enjoys good drainage but he agrees that it suffers from some overland water from properties to the rear in extreme downpours. Mr Houghton has made the valuation on the basis of the following sales evidence: Sale 1 - Lots 1 and 2 on RP 33919 - 2544 square metres - zoning “Residential A” - Tynan to Hii and Luher on 9 July 1996, for $1,150,000 - analysed unimproved value (after allowing for clearing, fencing and the removal value of a dwelling house) $1,150,000 - applied unimproved value $950,000 - situation 1 Palm Avenue. Mr Houghton describes this sale land as being a corner allotment slightly larger than is the subject land. Mr Houghton regards the sale land to be superior to the subject site due to its size, corner position, location generally and outlook. Mr Houghton agrees with a suggestion by Mr Crooke that this sale land is greatly superior to the subject land, but he says that is reflected in the values placed upon Sale No 1 land in comparison with that applied to the subject land. Sale No 2 - Lots 5 to 8 and 33 on RP 34458 - 2357 square metres - zoning “Residential A” - Fosscastle to Tuma on 7 May 1996 for $980,000 - analysed unimproved value $977,000 - applied unimproved value $930,000 - situation 35 Massey Street. Mr Houghton again describes this land as being a corner allotment. It is well elevated with distant views to the east across the Brisbane Airport. Mr Houghton considers the sale land to be superior to the subject land again due to its corner location, size, elevation and -- 3 of 6 -- 4 outlook. Once again Mr Houghton commented that this sale land is considerably superior to the subject land which is reflected in the difference between the applied unimproved values. Sale No 3 - Lot 10 on RP 43310 - 1197 square metres - zoning “Residential A” - Ramsay to Cooper on 26 July 1996 for $515,000 - analysed unimproved value $503,000 - applied unimproved value $475,000 - situation 173 Adelaide Street East. Mr Houghton comments that Adelaide Street East is a wide residential street in a good quality residential area of substantial prestige homes on large allotments. He says the sale parcel contained a dwelling at sale date which has since been demolished. A new dwelling house has been erected on the site. Mr Houghton comments that the sale site is a long block with a relatively narrow frontage and is considered inferior to the subject land due to its size and frontage. Mr Houghton disagrees that 173 Adelaide Street East is a superior block to the subject land. He points out that Adelaide Street East is now carrying a considerable amount of traffic, it has traffic lights at the end, and the sale block itself is approximately half the size of the subject land with half the frontage. Sale No 4 - Lot 4 on RP 58472 and Lot 2 on RP 80705 - 811 square metres - zoning “Residential A” - McCart to Martin on 22 May 1996 for $376,500 - analysed unimproved value $371,500 - applied unimproved value $340,000 - situation 14A Inverness Street. Mr Houghton comments that this sale land is an irregularly shaped block in a narrow cul-de-sac street. The sale land falls to the south (rear) and requires substantial retaining. It is situated in a good residential locality of quality homes. Mr Houghton considers this sale land to be far inferior to the subject land due to its size, shape and frontage. Sale No 5 - Lot 2 on RP 103432 - 1181 square metres - zoning “Residential A” - Stafford to Sexton on 1 March 1995 for $445,000 - analysed unimproved value $430,000 - applied unimproved value $380,000 - situation 30 Mayfield Street. Mr Houghton describes the location of this sale land to be on the opposite side of Mayfield Street to the subject land. Mr Houghton says it is a rear lot with hatchet access and is considered far inferior to the subject land due to its size, lack of frontage and rear lot location. Sale No 6 - Lot 2 on RP 122310 - 830 square metres - zoning “Residential A” - Gray to Copeland on 21 August 1996 for $335,000 - analysed unimproved value $331,000 - applied unimproved value $280,000 - situation 15A Mayfield Street. Mr Houghton points out that this sale parcel is situated only three blocks from the subject land. It is a rear parcel with irregular hatchet shape handle access. Mr Houghton -- 4 of 6 -- 5 considers the sale land to be far inferior to the subject land, again due to size, shape, frontage and rear lot location. Mr Houghton informed the Court that he has not taken into account as a basis for his valuation, movements in the Cost Price Index. I say quite properly so, since it has often been said by this Court that references to Cost Price Index movements when the task at hand is to determine unimproved value under the provisions of the Valuation of Land Act 1944 has no merit as a basis of valuation. What has to be determined is the unimproved value of a given parcel of land as at a specific date - in this case 1 October 1996 - and it is universally recognised in the valuation profession and by this Court that the best basis of valuation is analysed sales evidence. In this case, the only sales evidence placed before the Court is that provided and relied upon by Mr Houghton. Section 3(1)(b) of the Valuation of Land Act tells us what the meaning of “unimproved value” is in relation to improved land (as is the subject property). The sub- section reads: “The capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements do not exist.” It follows that the location of the residence across the frontage of the subject parcels is to be ignored for the purpose of determining its unimproved value. But the existence of the dwelling house is to be taken into account when valuing the land since section 17(1) of the Valuation of Land Act provides that “in making a valuation for land exclusively used for single dwelling house purposes, any enhancement in that value for that the land has been subdivided by survey or has the potential use for industrial, subdivisional or 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”. Now Mr Houghton told us that he has made the valuation of Mr Crooke’s land having regard to this provision as one large homesite, ignoring that it has been subdivided by survey or that it would have substantial potential for subdivision if the improvements (dwelling house) did not exist. It follows that there is no merit in Mr Crooke’s submission that any potential for the use of the rear land in the parcel is, for example for subdivision, prevented by the existence and location of the subject dwelling house. Nor can any weight be placed upon -- 5 of 6 -- 6 Mr Clay’s opinion that it would be most unlikely that Council would approve the removal or demolition of Mr Crooke’s dwelling house. But there is no evidence that Mr Crooke’s dwelling house is entered on the Register of the National Estate by the Australian Heritage Commission, nor that it is listed on the Register by the Queensland Heritage Council under the Heritage Act 1992, nor that it is included by the Brisbane City Council Heritage Unit as being a property classified by Council as being a “heritage building”. Rather it is, on the evidence, a large residential dwelling, parts of which date back to 1911 or 1917. Accordingly, the recent finding by the Land Appeal Court (judgment handed down in Cairns on 12 August 1998) that the unimproved value of a residential zoned heritage registered property in Townsville is diminished by the Heritage listing is not applicable in this case. The remaining matter to be considered is the claim by Mr Crooke that an allowance should be made in the valuation for the cost of remedying the surface water problems. Mr Houghton told us that the reason for the reduction of $30,000 in the valuation of the subject land as at 30 June 1993, was a submission then made by Mr Crooke about the cost of providing drainage works and the retaining wall, and that this allowance as in all annual valuations since that time remained as a “built-in” factor in relation to a valuation which would otherwise have been applied based on the available sales evidence. This being the case, should the Court make a further allowance for this disability, it would amount to “double dipping” and accordingly not appropriate. For the aforegoing reasons, I cannot find that the onus resting upon the appellant under the provisions of section 45(4) of the Valuation of Land Act has been discharged. The appeal is dismissed, and the unimproved value of Lots 14 and 15 on RP 33587, Parish of Toombul, as determined by the respondent Chief Executive in the sum of $510,000 is affirmed. (CH Carter) Member of the Land Court -- 6 of 6 --