Chung v Chief Executive, Department of Natural Resources [1998] QLC 96

LAND COURT, BRISBANE 11 September 1998 Re: Determination of Unimproved Value - City of Brisbane: Division of Brisbane - (Ref. AV98-84). Sze Ming Chung v Chief Executive, Department of Natural Resources D E C I S I O N This is an appeal against the determination by the Chief Executive of an unimproved value of $175,000 for a “Residential BR4” zoned parcel of land described as Lot 27 on RP 9128, Parish of North Brisbane, County of Stanley, containing an area of 531 square metres and which is situated at the corner of Charles (No 33) and Cross Streets, New Farm. The parcel also has a frontage to Gertrude Street and so it effectively has three street frontages. 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 $114,000 ($215 per square metre). Mr Chung furnished evidence in support of the grounds of appeal, from which it can be seen that the appeal is based mainly on the ground of relativity. Mr Chung tendered in evidence a number of schedules showing the comparison between the valuation of the subject land and a number of other parcels in Charles Street. But before including this material in this decision, I should briefly say that Mr Chung informed the Court that the valuation of his land has been increased since 1 July 1990, from $87,000 to $175,000 as at 1 October 1996 - or an incremental factor of 101% - or an average of 15% per annum which factor Mr Chung considers to be on the high side. Mr Chung calculates that the valuation appealed against ($175,000) represents a value of $330 per square metre and he feels this valuation is excessive in relation to other valuations in Charles Street. He cites the following valuations made by the respondent Chief Executive as at the same relevant date of 1 October 1996:- No 11 Charles Street - 417 square metres - value $139,000 or $333 per square metre [1998] QLC 96 -- 1 of 5 -- 2 No 15 Charles Street - 493 square metres - value $120,000 or $243 per square metre No 18 Charles Street - 688 square metres - value $165,000 or $240 per square metre No 26 Charles Street - 524 square metres - value $165,000 or $315 per square metre No 32 Charles Street - 1214 square metres - value $255,000 or $210 per square metre No 41 Charles Street - 908 square metres - value $200,000 or $220 per square metre No 47 Charles Street - 531 square metres - value $177,500 or $334 per square metre No 58 Charles Street - 607 square metres - value $143,000 or $236 per square metre Now it transpired in evidence that the respondent’s Departmental valuation records do not refer to a property at No 58 Charles Street and it seems this valuation should be for 38 Charles Street. Mr Chung stressed in evidence that the valuation of the subject land was $348 per square metre when first valued for the 1 October 1996 relevant date valuation, and this is about 66% higher than the minimum valuation rate of $210 per square metre in Charles Street and he believes such a huge difference in valuation is unreasonable. But this comparison was made before the valuation was reduced from $185,000 to $175,000 consequent upon the consideration by the respondent Chief Executive of an objection lodged by Mr Chung, so the calculation of $348 per square metre should read $330 per square metre. Mr Chung refers in particular to the valuation of No 38 Charles Street with an area of 607 square metres and which parcel is situated opposite the subject land and which, as noted above, is valued as at 1 October 1996 at $143,000 ($236 per square metre). But although the valuation of the subject land was reduced on objection, Mr Chung still believes it to be excessive in relation to subsisting valuations in Charles Street. Mr Chung also referred the Court to the weekly rental he receives from the house erected on No 33 Charles Street in the sum of $210-$230 per week at or about the relevant date of 1 October 1996, but reference to rentals obtained from properties is not a worthwhile ground of appeal as what has to be determined is the unimproved value of the land and the Valuation of Land Act 1944 tell us that, for valuation purposes, the improvements upon the land are presumed not to exist (section 3(1)(b)). -- 2 of 5 -- 3 Mr Chung does not believe that the subject land, being a residential lot, having three street frontages is an advantage over inside lots because of the lack of privacy reasons, nor that the subject land has any advantage over other lots in Charles Street with respect of views. The valuation under appeal was supported in evidence by Registered Departmental Valuer George William Lindberg who describes the nature of the subject land as being of medium elevation, level with its Charles Street frontage and with a slight fall from north to south. Mr Lindberg informed the Court that the subject land has been valued under the provisions of section 17(1) of the Valuation of Land Act as land being used for the purpose for which it was being used as a single dwelling house, with reference to the following analysed sales evidence:- Sale No 1 - Lot 11 on RP 9040, Parish of North Brisbane - 293 square metres - Withington to Fichera on 16 November 1996 for $80,000 - analysed unimproved value $79,500 - applied unimproved value $76,000 - zoning “Residential BR3” - situation 22 Lloyd Street, New Farm. Mr Lindberg describes this sale lot as being a small, narrow allotment with medium elevation in a narrow dead-end street. The land has a gentle crossfall from north-west to south-east. Mr Lindberg considers the sale land to be overall inferior to the subject parcel because of its size and position. Sale No 2 - Lot 2 on RP 888215, Parish of North Brisbane - 305 square metres - Bowman to Fitzpatrick on 21 February 1996 for $95,000 - analysed unimproved value $94,500 - applied unimproved value $90,000 - zoning “Residential BR4” - situation 3 Bowman Lane, New Farm. Mr Lindberg describes this site as being a small allotment with low elevation and with an urban outlook. Access to Bowman Lane is via an easement over Lot 1 on RP 54179. The sale land has a slight crossfall from north to south and has no formed footpath. Mr Lindberg considers this sale land to be overall inferior to the subject land because of its smaller area, location, outlook and access. Sale No 3 - Lot 22 on RP 897817, Parish of North Brisbane - 450 square metres - Guardala and Velenic to Iuzzolino on 14 May 1996 for $153,000 - analysed unimproved value $152,000 - applied unimproved value $138,000 - zoning “Residential A” - situation 2 Dawson Lane, New Farm. Mr Lindberg describes this sale land as being an irregularly shaped allotment in a narrow dead-end street with medium elevation and with an urban outlook. He again -- 3 of 5 -- 4 considers this sale land to be inferior to the subject land due to it being located in an inferior area, and further from amenities. Mr Lindberg stressed in evidence that the subject land has, in his opinion, quite an advantage over neighbouring nearby lots in having three street frontages which feature he describes as being very rare. Advantages include better access and extra light and air. Other advantages enjoyed by the subject land are said by Mr Lindberg to include its proximity to shopping facilities and banks while not being in the “hustle and bustle” of New Farm. Mr Lindberg is of the opinion that valuation comparisons on a value per unit area (rate per square metre) basis in residential area valuations is not a reliable method of comparison, but is acceptable in principle for commercial and for multi-unit residential valuations. With this contention I agree as it is well established that valuing on a rate per square metre in residential area valuations is not to be preferred to valuing on a site-to-site basis - vide Land Appeal Court decision in Re: H and E Grahn v. The Valuer-General - City of Redcliffe - (1992-93) 14 QLCR 327. Now Mr Lindberg told us that his investigations reveal that Nos 15, 18 and 38 Charles Street properties are developed as multi-unit residential sites and that this development had escaped detection by his Department for the 1 October 1996 relevant date valuation. He says that normally multi-unit developed sites are valued at higher levels of value than are comparable single dwelling house sites in the same area, and Mr Lindberg is of the view that the 1 October 1996 relevant date valuations of Nos 15, 18 and 38 Charles Street are in error in that they are too low. He has brought this to the attention of a Senior Departmental Valuer who is to address the issue. Mr Lindberg does not see the subject valuation to be at odds with other single dwelling house site valuations in Charles Street. He points out that No 26 Charles Street ($165,000 with a similar area) has the disadvantage in comparison with the subject land of being an inside block located next door to a block of flats, and he considers the subject land to be superior to No 26 Charles Street. Mr Lindberg says the valuation of 47 Charles Street ($177,500 with a similar area) with two street frontages but being on the downside in comparison with the subject land indicates that perhaps the reduction in the valuation of the subject land as a consequence of the consideration of the objection was generous. Mr Lindberg again does not see the valuation of the subject land being anomalous with that of $139,000 for No 11 Charles Street which is a smaller site and again next door to flats. He prefers the subject land to No 11 Charles Street. -- 4 of 5 -- 5 Now it is well established that the best method of valuation when the task at hand is to assess unimproved value under the provisions of the Valuation of Land Act is the use of analysed sales evidence. Now in this respect the only evidence before the Court is that presented by Mr Lindberg. I have carefully considered it and I cannot come to a conclusion that a valuation of $175,000 for the subject land is unsupportable in relation to the sales - particularly that of Sale No 3 in Dawson Lane. Now it is to be recognised that challenges to valuations made under the provisions of the Act can be usefully made using the ground of relativity relied upon by Mr Chung. But he has some difficulty with his evidence in this case. Clearly there has been an error made by the respondent in valuing Nos 15, 18 and 38 Charles Street as single dwelling sites when they are in reality used for multi-unit residential purposes, and to compare the valuation of the subject land with that of these sites is not appropriate since to do so would not be a meritorious valuation exercise. Further, Mr Lindberg does not see the valuation of the subject land as being anomalous with that of Nos 26, 47 and 11 Charles Street when looked at as we must, on a site-to-site basis. Another problem for Mr Chung is that references to increases in valuations upon the revaluation of land within a local authority area is not a worthwhile ground of appeal. It is the unimproved value of a particular parcel of land as at a specific relevant date which has to be determined and this is best assessed in relation to analysed sales evidence. It is only the respondent Chief Executive who has provided and relied upon such evidence. In these circumstances, it cannot be said that the onus resting upon the appellant under the provisions of section 56(2) of the Valuation of Land Act has been discharged. The appeal is dismissed, and the unimproved value of Lot 27 on RP9128, Parish of North Brisbane, as determined by the respondent Chief Executive in the sum of $175,000 is affirmed. (CH Carter) Member of the Land Court -- 5 of 5 --