Connolly v Chief Executive, Department of Natural Resources [1998] QLC 14

LAND COURT, BRISBANE 11 February 1998 Re: Appeal against Annual Valuation Valuation of Land Act 1944 Valuation Roll No: 206-1847/17900 Local Government: Jondaryan Shire (AV97-85). David A and Suzanne P Connolly v. Chief Executive, Department of Natural Resources (Hearing at Toowoomba) D E C I S I O N Background: This matter relates to a property located at 37 Cotswold Hills Drive, Toowoomba, and described as Lot 126 on RP 864785, Parish of Gowrie. The subject has an area of 4,000 square metres, and is located about 9 kms west of the main Toowoomba Post Office. The key issues are the nature of the land, the comparison of sales and relativity. The parcel is located in an estate comprising large allotments averaging about 5,000 square metres, all with bitumen sealed roads and concrete kerbing and channelling. The land is zoned as "Rural Residential A" under the Town Plan of the Jondaryan Shire Council of 26 November 1993, and effective at the date of valuation of 1 January 1996. The subject has good access to Cotswold Hills Drive, with telephone, underground power and town water connected. The land is triangular in shape with a frontage of 73 metres and an average depth of 105 metres. The land slopes downward from the road at an easy slope for about half its depth, and then falls steeply into a natural gully. A branch of that gully also extends along a narrow access strip adjoining Lot 127 to the west of the subject. At the rear of the subject the land rises again from the gully to a small isolated area. The land and its surrounds is black soil, coolibah and ironbark country. The gully is timbered with mature trees which maintain stability. There is a stormwater manhole discharging along the gully to the west of the subject. The land is developed with a brick veneer dwelling on a concrete slab and associated earthworks. At the request of the appellant, and with the consent of the respondent, I inspected the property. On 11 March 1996, the Chief Executive, Department of Natural Resources, issued a [1998] QLC 14 -- 1 of 7 -- 2 valuation of the subject at $42,500. Following an objection, the Chief Executive amended that valuation, and on 15 April 1997, issued a new valuation at $35,000. The appellants have appealed that figure claiming the valuation should more properly be $5,000. At the hearing the appellants later lead an amended valuation at $32,500 or less. Mr DA Connolly appeared and provided a statement for the appellants, and also called evidence from Mr WE Johnson, a registered valuer and real estate agent. Mr BM Tannock appeared for the respondent, calling evidence from Mr BR Krause, the departmental registered valuer responsible for determining the valuation. Evidence: The appellant argues that the subject is one of the smallest and least valuable lots in the estate, which has been developed in stages over the last seven to eight years. It has a triangular shape which limits to some extent the development of the subject, and there is a large gully which crosses the parcel, virtually making the rear half of the lot useless. The gully also harbours pests and vermin which impact upon the dwelling. There is a large (15 metres) set back requirement by the Jondaryan Shire Council, although the garage has been allowed to be constructed within that set back distance.The front half of the parcel is therefore restricted for building purposes. The natural gully to the west of the subject, together with the formed earth drain around the south and east of the existing dwelling, also combined to limit further expansion of the dwelling. The respondent agrees with these disabilities and the extent of improvements, and claims that they have been allowed for in the valuation. A further matter of concern for the appellant is the nature of the black soil of the subject, and the surface waters that flow across the subject from higher properties to the south and east. As the subject is low, it tends to collect the surface water and, because of the nature of the black soil, movement across all but the hard stand areas is virtually very difficult in wet weather. Because of cut and fill undertaken for constructing the dwelling, the uncompacted fill on the south side of the large gully to the rear of the lot is subject to erosion. Views are more restricted than adjoining properties. Because of the movement in the soil there is evidence of cracking in the floor of the garage and the external clothes hoist has stability problems. Mr Tannock agrees that the site has restrictions which would prevent the development of a tennis court and possible swimming pool, but maintains that the effective building area, approximately one-third to one-half of the site (1100 square metres), is adequate to accommodate the current dwelling of 225 square metres. In respect of whether the balance area of the subject, beyond the usable building area of 1100 square metres, has any real value to a purchaser, the appellant argues that it would reflect little additional added value, particularly in view of the maintenance and vermin problems -- 2 of 7 -- 3 associated with the gullies. Apparently the lot sold in early 1995 for $49,000, and the dwelling was constructed by the former owner (Boyle) during 1995, and the appellants acquired the property on 6 December 1995, one month prior to the date of the current valuation. Mr Johnson agrees generally with Mr Krause's description of the nature of the land, and also compared relativity between the unimproved values of the subject ($35,000) and adjoining Lot 90 ($47,000) and Lot 125 ($46,000). Both adjoining lots he argues are considerably superior to the subject in views, the usable areas are higher and are less impacted by the gullies. Mr Johnson concludes the unimproved value of the subject does not reflect its disadvantage. To support his estimate of the unimproved value of the subject, Mr Johnson provided the following sales of vacant lands: •Sale 1 -(Diana Court & Cotswold Hills Drive - Lot 103 on RP864785). This is a reasonably elevated corner lot of area 4,038 square metres, located immediately opposite the subject. The sale is higher than the subject, and has a more regular shape than the subject. Surface water for the sale runs off towards the subject, and the sale suffers no impact of gullies. This sale sold in July 1996, for $47,000, and has an applied unimproved value of $50,000 at 1 January 1996. •Sale 2 - (Diana Court & Cotswold Hills Drive - Lot 99 on RP864785). This is also a corner lot opposite the subject with similar characteristics as Sale 1, and an area of 4,397 square metres. The sale sold in January 1996 for $47,000, and has an applied value of $50,000 at 1 January 1996. •Sale 3 - (Diana Court - Lot 101 on RP 864785). This is a cul-de-sac inside lot of area 4,514 square metres, with higher elevation and better views. It has similar other characteristics as Sale 1. The sale sold in April 1996 for $42,000, and has an applied value of $53,000 at 1 January 1996. •Sale 4 - (Diana Court - Lot 102 on RP 864785). This is similar to Sale 3 and has an area of 5,108 square metres. The sale sold in July 1996 for $44,000, and has an applied value of $50,000, at 1 January 1996. From his analysis of those sales and comparing the disabilities of the subject, Mr Johnson concluded the unimproved value of the subject was $32,500. While Mr Tannock did not disagree with Mr Johnson's comparison, he noted that all four sales occurred after the date -- 3 of 7 -- 4 of the current valuation at 1 January 1996. Mr Tannock suggested that other sales evidence in the area indicated that the market had fallen in the period 1 January 1995 to 1 January 1996, the period for which he was required to assess the current valuation. Mr Johnson's sales were consistent with that fall. In support of his valuation, Mr Krause provided the following sales of vacant land: •Sale 1 - (Hamzah Drive - Lot 84 on RP 809514). This is a 6,380 square metre lot adjoining the north-eastern boundary of the subject. It has easy sloping land running down to a gully on the rear boundary, with limited views. It has similar access and services as the subject. The nature and size of the land is superior, and overall the sale is seen as superior to the subject. The sale sold in April 1995, for $53,000 which after allowing for improvements, provided an analysed value of $52,000 and an applied value of $52,000. • Sale 2 - (Jane Court - Lot 108 on RP 864785). This is a 4,680 square metre lot located about 200 metres south-west of the subject, with similar access and views. It is an elevated site with northerly views and a moderate slope. The sale has a better elevation and outlook and a larger area and is overall superior. The sale sold in July 1995 for $59,000, which after allowing for improvements, was analysed at $58,000 and applied at $58,000. • Sale 3 - (Diana Court - Lot 100 on RP 864785). This is a 4,411 square metre cul-de-sac inside lot south of the subject. It is an elevated site with fair views to the north-west, and with moderate slopes. Diana Court is bitumen sealed with concrete kerbing and channelling. Similar services exist as for the subject. The sale has a higher elevation and better outlook with greater usable land. Overall, the sale is superior. The sale sold in August 1995 for $57,000, which after allowing for improvements provided an analysed value of $56,000 and an applied unimproved value of $54,000. Both parties agree that the subject is inferior to all seven comparable sales, and that the usable part of the building area of the subject relates to an area of about 1100 square metres. Both Mr Johnson and Mr Krause agree that the market declined slightly during 1995, and is again starting now to rise. Mr Krause advised that had there been a revaluation for the area at 1 October 1996 (there was none undertaken), then he would have used the sales supplied by Mr Johnson. However he agreed that Mr Johnson's Sale 2 was within the relevant period for the current valuation. Mr Krause saw some advantage to the subject with the bushland in the gully -- 4 of 7 -- 5 providing a measure of privacy. In discussing the impact of the soil type, it was agreed by Mr Krause that, following discussions with the Jondaryan Shire Council, he was informed that the original black soil was classified as a "H" type prior to the earthworks for the dwelling. That was similar to the surrounding parcels. Following the earthworks, fresh soil testing confirmed that the building site, with the removal of the black soil, was later classified as an "M" type soil, thus requiring lesser foundation costs than were required for the "H" type soil. In the circumstances of comparing the subject to the surrounding parcels, Mr Krause believes the soil type was not relevant. Mr Krause also believes that the current ponding of water from the subject would be effectively overcome with appropriate drainage works, a normal part of developing a sloping lot for slab construction. In considering the original sale of the subject at $49,000, Mr Krause noted that there was only a small difference in asking price between the subject and the surrounding lots. He believes that indicated that purchasers did not display much resistance to the features of the subject, now argued as major disabilities. However, in re-assessing the valuation following the objection conference, Mr Krause reduced the valuation to $35,000 to provide a conservative figure recognising the nature of the subject. In respect of the ponding of surface water from the south and south-east, Mr Krause noted that the kerbing and channelling would direct much of the excess water from the subject, as compared to parcels to the south of Cotswold Hills Drive. In recognising that the subject was possibly the least valuable parcel in the area, Mr Krause sought some benchmark to indicate what people might pay for a housesite in the western part of Toowoomba. He compared the subject area with Wilsonton to the east, which has lots of area about 1100 square metres, and generally lots of 640 square metres to 708 square metres which have sold in the range $31,500 to $36,000. Wilsonton has sewerage available, but has more economy-style homes, and no open space feeling such as at Cotswold Hills. Mr Connolly argues that it is not a reasonable comparison as the two areas are entirely different. Mr Krause advised that in setting the original valuation at $42,500, he had relied upon the previous records of relativity with neighbouring parcels established at the stage of subdivision, and had not inspected the subject. Following the objection he had further inspected the site and then increased the allowance for the impact of the gully, bearing in mind the additional erosion in the gully to the west, and also upon his experience in the area. He made a reduction in the valuation of $42,500, obtaining the revised figure of $35,000. Decision: In considering first the nature of the land I note that both valuers agree that the parcel is perhaps the least valuable in the entire Cotswold Hill Estate. The current unimproved value at $35,000 supports that conclusion. There is no argument about the physical impact of the two -- 5 of 7 -- 6 gullies which impact the subject, although Mr Krause sees some possible attractiveness in their contributing to privacy. The gullies clearly are more of a detriment than any enhancement for whatever reason. In the matter of the type of soil upon the subject, it is also not disputed that the "H" type black soils are difficult to deal with for dwelling construction, or for landscaping purposes. However, the surrounding comparable parcels all have similar disabilities. I turn then to the comparison of sales adopted, and note that Mr Johnson has used four sales opposite and very close to the subject. Mr Krause has analysed three other sales with similar locations as those of Mr Johnson. The only difference between the suitability of any of those sales lies in the dates of their occurrence. The three sales of Mr Krause, and Sale 2 of Mr Johnson, all occurred within the relevant period of 1 January 1995 to 11 March 1996. The remaining three sales of Mr Johnson all post-date that period. I note also that both valuers agree that the property market had declined during 1995, and there is little to separate the valuers' conclusions of the unimproved value of the subject. Precedent in the courts provides guidance in respect of the relevant dates for adoption of sales. For example in RG McMurray v. The Valuer-General (1983)(LAC) 9 QLCR 35, the Land Appeal Court said at page 36: "As is stated in the decision handed down by the learned President, the Land Court, and on appeal the Land Appeal Court, can only consider the primary production activities carried on on the land between the date of the valuation (31st March 1980) and the date of the issue of the valuation (12th February 1981). " In this matter however I also note Mr Krause agrees that Mr Johnson's Sales 1, 3 and 4 would all be relevant for a later valuation, had one occurred on 1 October 1996. On balance I find there is nothing really to discredit any of the sales, but I place higher weight upon Mr Krause's three sales, and Mr Johnson's Sale 2. In the end the final determination based upon all the sales is really a matter of the professional judgment of the two experienced valuers. I turn now to the matter of relativity between the subject and surrounding parcels. I note that the subject at $35,000 has been afforded a considerable reduction compared to Lot 125 ($46,000) adjoining to the west, and Lot 90 ($47,000) and Lot 84 ($52,000) adjoining to the east. In addition, Lots 99 and 103 opposite the subject are both valued at $50,000. On balance, I believe these values fairly represent the relative natures of the parcels. Summary: In considering the requirements of the Valuation of Land Act I note that Section 45(4) states: "45.(4) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any -- 6 of 7 -- 7 and every such ground shall be upon the owner. " In accordance with that direction, clearly the responsibility falls upon the appellants to prove that the respondent has either made a serious error of fact, or has relied upon a wrong principle in determining the valuation. In this regard I note the finding of the High Court of Australia in Brisbane City Council v. The Valuer-General HC (1977-78) 140 CLR 41, where Gibbs J. said at page 56: "In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s.13(7) is rebutted. " I believe the appellants have not proved those requirements and their appeal should fail on those matters. Having therefore concluded that the valuation of the respondent has not been discredited, I turn to the legislation and note that direction is supplied in Section 33 which says: "33. 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 shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered. " Conclusion: Having considered the whole of the evidence I am not persuaded that the appellants have proved their case. The appeal is dismissed and the unimproved value of the Chief Executive at $35,000 is affirmed. (NG Divett) Member of the Land Court -- 7 of 7 --