Dimont v Chief Executive, Department of Natural Resources [1998] QLC 75

LAND COURT BRISBANE 2 July 1998 Re: Determination of Unimproved Value - City of Brisbane - Division of Windsor. (AV97-322). M Dimont v. Chief Executive, Department of Natural Resources D E C I S I O N Manfred Dimont has appealed against the determination by the respondent Chief Executive of an unimproved value of $50,000 (increased from $38,250 - or by a factor of 31%) for a "Residential A" zoned site located at 30 Victoria Street, Windsor. The land is more particularly described as Lot 266 on RP 18524, Parish of Enoggera, County of Stanley, and contains an area of 405 square metres. 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 $38,250, although he told us during the case that the valuation should not exceed $40,000. Mr Dimont furnished evidence in support of his appeal which is mainly based on the disability of flooding and its effect on the value of the subject land in comparison with the valuation of $47,500 placed on the flood-free Lot 410 on RP 18524 as at the same relevant date. Lot 410 is also owned by Mr Dimont and is situated nearby at 8 Swan Terrace, Windsor. Mr Dimont explained that the subject land was last inundated with flood water on 4 to 6 May 1996 when the total area of his land was flooded to a depth of about 2 feet (0.6 metres) for more than two days. His land is submerged every 2 or 3 years. Mr Dimont told us that the subject land has an elevation of 1.6 metres and that 8 Swan Terrace has an elevation of 3 metres, and he regards 8 Swan Terrace to be a much better living area in comparison with that within which the subject land is situated which is also badly affected by a noisy and dusty cement and sand industry (Bowser and Lever) situated across Victoria Street from his property. Mr Dimont pointed in evidence to what he sees as other relativity valuation problems in the area. He says 18 Cullen Street is valued at $50,000 and 19 Cullen Street is valued at $57,000, and he believes 18 Cullen Street is on the better side of the street. Mr Dimont believes the only resolution to the problem is a complete valuation overhaul in the area. Registered Departmental Valuer James Thomas Houghton, who was not the original [1998] QLC 75 -- 1 of 3 -- 2 valuer, told us that he agrees with the valuation under appeal. He describes the nature of the subject land as being at road level and generally level in topography. He says it is situated in a locality of low elevation which has been subject to flooding. The surrounding housing is basic in standard. Mr Houghton confirms that the land is located opposite industrial properties but he points out that it is situated in close proximity to the Brisbane CBD, being less than 4 kms from the City centre. Mr Houghton relies for his opinion as to the correctness of the valuation under appeal upon the analyses of three sales of lots, each of which, like the subject land, was subject to flooding in 1974. Details are: Sale No 1 - Lot 2 on RP 817601 - 406 square metres - Nielson to Sallows on 2 March 1996 for $84,500 - zoning "Residential B-3" - situation 45 Bale Street, Albion - analysed unimproved value $83,000 - applied unimproved value $73,800. Mr Houghton says that although the subject land is closer to the Central Business District, the sale parcel is superior to the subject land due to its shape, frontage, slightly better elevation and general location. Sale No 2 - Lot 4 on RP 18509 - 539 square metres - Boucher to Kelsall on 7 June 1995, for $54,500 - zoning "Inner Residential" - situation 22 Earle Street, Windsor - analysed unimproved value $57,000 - applied unimproved value $55,800. Mr Houghton describes this sale land as being a narrow frontage lot with industrial properties opposite and adjoining the sale land. He says the sale block is above road level with a north-west to south-east crossfall. It is severed by a large stormwater drainage easement and underground piping which discharges into Enoggera Creek. Mr Houghton says this easement makes the sale parcel unable to be developed without major design and foundation works. Notwithstanding, Mr Houghton sees the sale parcel to be superior to the subject land due to its location and topography. Sale No 3 - Lot 1 on RP 855552 - 383 square metres - Medhurst to Zuttion on 3 March 1993 for $57,500 - zoning "Residential A" - situation 46 Cullen Street, Windsor - analysed unimproved value $56,500 - applied unimproved value $55,000. Mr Houghton points out that this is a dated sale but it supports the level of value applied to the subject land. He says the sale land is similar in elevation to the subject land but is considered superior to it as a site due to its shape and frontage and it is without the industrial detriment suffered by the subject land. Mr Houghton largely negated the attack which was made by Mr Dimont upon the Departmental valuations in the area by conceding that there are valuation relativity problems in the area. He says that the valuation of 8 Swan Terrace land should be much higher than -- 2 of 3 -- 3 $47,500, and agrees that there are also valuation problems in Cullen Street. But Mr Houghton says that no action has been taken by the Department to change the valuation relativity problem in the area while this case is before the Court. But it is his intention after this case to amend the values in Swan Terrace and in several other areas and in Cullen Street. Although this may be a negative outcome in this appeal for Mr Dimont, it at least complies with his suggestion that there should be a valuation overhaul in the area. Mr Houghton says that he agrees with what Mr Dimont has said in the case about valuation relativity, but stresses that it is not the valuation of the subject land which is in error since he believes it is supported by his analysed sales evidence. There is no doubt, and this Court has repeatedly found, that the best basis of valuation when the task is to determine unimproved value is the analyses of vacant or lightly improved sales. In this respect, the only such evidence before the Court is that provided by Mr Houghton. Now I can readily understand that Mr Dimont does not have the resources to search all the relevant sales data in the area, and, as he said, he is only before the Court to point out the valuation anomalies since he now has more time available to do so. A reasonably long-standing authority, although not so long-standing that I could regard it, as suggested by Mr Dimont, as being "a bucket of ashes", for the proposition that relativity in valuations (or valuation increases) is not to be preferred to the use of sales evidence. It is the decision of the Land Appeal Court in NR and PG Tow v. The Valuer-General (1978) 5 QLCR 378. In that judgment the Court said that "it follows that a large increase over and above the previous valuation in itself is not a relevant issue provided bona fide sales of comparable parcels support the new valuation". So in this case, I cannot set aside the sales evidence as a basis of valuation in favour of the use of "common sense" (a term used by Mr Dimont) as a basis for this decision. Adopting Mr Houghton's evidence, as I ought, it seems that there has been an error made by the Chief Executive in valuing 8 Swan Terrace and the blocks in Cullen Street. This being the case, to reduce the valuation of the subject land on the basis of the relativity evidence would be to extend the error to the valuation of it and this, of course, is undesirable. In these circumstances, the appeal fails and the unimproved value of Lot 266 on RP 18524, Parish of Enoggera, as determined by the respondent Chief Executive in the sum of $50,000 is affirmed. (CH Carter) Member of the Land Court -- 3 of 3 --