Brown v Chief Executive, Department of Natural Resources [1997] QLC 82

LAND COURT BRISBANE 30 MAY 1997 Re: Determination of unimproved value - City of Brisbane - Division of Balmoral AV97-14 Peter H Brown v. Chief Executive, Department of Natural Resources D E C I S I O N This appeal lies against the determination by the respondent Chief Executive of an unimproved value of $220,000 for Lot 187 on RP 12826, Parish of Bulimba, County of Stanley, containing an area of 693 m². This is a “Residential BR3" zoned lot situated at 16 Bede Street, Balmoral, in what is described by the Chief Executive as an established ridge top residential locality comprised of older style, good quality homes. The relevant date for the determination of the unimproved value is 1 January 1996. The respondent Chief Executive has valued the land as a single unit dwelling house site in accordance with the provisions of s.17(1) of the Valuation of Land Act 1944. The appellant contends within the Notice of Appeal for an unimproved value of $123,900, which value reflects an increase of 5% over the previously subsisting valuation of $118,000 as at 1 January 1995. Peter Handley Brown furnished evidence in support of his appeal, the grounds of which read: “That no change of any magnitude has taken place in Bede Street since the previous valuation of $118,000, which was the result of an offer from the Valuer-General arising from an appeal to the Land Court, that would cause the valuation to rise above the district average and that no change, relating to transport, shopping, recreation, noise control, health and other services, has taken place in the district that would warrant a valuation increase.” Now Mr Brown says that changes in valuations, if any, of any magnitude that may have a bearing on valuation, would be sales of comparable properties which, he says, show how difficult it is to accurately determine valuations. I can understand Mr Brown’s submission, but it is unfortunately based on unreliable data. He quoted nine sales of properties in Bede and Dilkera Streets to illustrate the irregularity in the market, but these are sales of improved (presumably dwelling house) properties, and the ratios as between the Chief Executive’s applied valuations and the sale prices range by factors of between 0.38 and 0.9. However, nothing can be gained from this evidence as there are [1997] QLC 82 -- 1 of 5 -- 2 no analyses before the Court of the sales to show unimproved values. Added to this, there is authority for the proposition that when the task at hand is to determine unimproved value, then the best basis of valuation is the sales of unimproved, or lightly improved properties - vide the Land Appeal Court decision in Fischer v. The Valuer-General (1983) 9 QLCR 44, p.46. Mr Brown told us that in 1990, an agreement was reached between himself and the then Valuer-General that the valuation of his land was $95,000, and he claims that this provided a benchmark against which future valuations were to be made. Mr Brown points out that the valuation of $225,000 (adjusted by the Chief Executive to $220,000 prior to this hearing) represents an increase of 137% over the agreed value for his land in 1990, or an increase of 90.6% over the valuation set as at 1 January 1995 of $118,000. In support of his contention that the 1995/96 valuation increase of 90.6% for the subject land is excessive, Mr Brown quotes the increases in the 1995/96 valuations for some other properties in Bede Street. They are: No. 9 - $123,000 to $141,000 - 14.6% No. 19 - $91,000 to $105,000 - 15.4% No. 24 - $126,000 to $180,000 - 42.8% No. 25 - $170,000 to $195,000 - 14.7% No. 27 - $155,000 to $190,000 - 22.5% Mr Brown produced in evidence a series of photographs depicting the available views, or lack thereof, from the subject land. These have proved helpful in my understanding of the evidence about the relative elevation and outlook from the subject land, which Mr Brown says is one of the lowest blocks in Bede Street. Mr Brown specifically makes a comparison between the outlook available from his land, which is described by him to be restricted by the house erected at No. 14 Bede Street and by large trees on other adjoining properties, with what he describes as being a good view to the east from No. 19 Bede Street which is valued at $105,000. Mr Brown says No. 19 Bede Street is a quite high lot with a view over housetops to the city and mountains. He regards Lot 27 as probably being the highest block in the area with superior and unrestricted views. Mr Brown fairly says that he regards that the view available from the subject land to be better than that to the east from lots on the eastern side of Bede Street (with odd street numbers). Mr Brown put in evidence a market appraisal of the subject property by Ray White Morningside (Anne Prentice) which he recently obtained. It suggests the current selling price of 16 Bede Street to be $250,000 to $290,000, but again no reliance can be placed on this evidence as it does not purport to show unimproved -- 2 of 5 -- 3 value, and further, the author was not called in evidence to enable the respondent Chief Executive, and for that matter the Court, to test her opinion. Called in evidence by the respondent Chief Executive to support the amended valuation of $220,000 for the subject land was departmental registered valuer Jennifer Robyn Manners, who describes the nature of it as being an elevated allotment with a westerly aspect falling below Bede Street. Miss Manners says the property enjoys views to the Story Bridge and city buildings, to Mount Coot-tha and the suburbs. Miss Manners bases her valuation of the subject land upon the sale of Lot 73 on RP 12825 containing an area of 405 m² from Knightstower Pty Ltd to Dujmovic on 7 October 1994 for $170,000 - situation Dilkera Street (corner Main Street), Balmoral. Miss Manners analyses this sale to show an unimproved value of $169,000 and the respondent Chief Executive values this land as at the relevant date of 1 January 1996 at $150,000. Miss Manners describes Lot 73 as being an elevated corner parcel which falls steeply from the road to the rear boundary, with views to the city, Mount Coot-tha and suburbs. By way of comparison, Miss Manners sees the subject land as providing an easier building site than Lot 73, and points out that it is also larger than Lot 73. Miss Manners summarises her view on the comparison between the sites as being that the subject site is superior because of its size, topography, elevation and better access. In support of her opinion that the valuation of the subject land at $220,000 is not out of line with other 1 January 1996 relevant date valuations in the area, Miss Manners provided the Court with a schedule showing values, description of sites, and her idea of relative comparisons for properties rising in elevation up to the ridge line. Brief details are: Lot 73 on RP 12825 - 405 m² - unimproved value $150,000 - situation Dilkera Street (details already discussed); Lot 193 on RP 12826 - 696 m² - unimproved value $180,000 - situation Collings Street. This is a moderately sloping lot with city views from a westerly aspect, situated at the rear of the subject land. The subject land has superior elevation, topography and access and is of similar size; Lot 187 on RP 12826 - 693 m² - unimproved value $220,000 - subject land (details already discussed); Lot 237 on RP 12827 - 453 m² - unimproved value $105,000 - situation Bede Street. This is a moderately to steeply sloping lot falling from the road. It has easterly views to the Gateway Bridge - and is situated across Bede Street from the subject land. The subject land has, in Miss Manners’ opinion, comparable elevation but the views of the city are considered superior. Miss Manners says the subject land has superior topography, views, access and size than Lot 237. Miss Manners explained to the Court that the 1 January 1996 relevant date valuation of the subject land and other sites along the ridge top were manually -- 3 of 5 -- 4 produced in relation to the sale of Lot 73, while other valuations in the area were factored in relation to the sale of a lower elevated site in Derby Street for $90,000. Miss Manners is of the opinion that in previous valuations, the valuations on the western side of Bede Street were too low. She informed the Court that the 1 January 1996 relevant date valuations of Lot 188 on RP 12826 (adjoining the subject land to the south) is $230,000, and the unimproved value of Lot 185 on RP 12826 (two sites removed to the north of the subject land) is $225,000. The unimproved value of Lot 186 on RP 12826 (adjoining the subject land to the north) is $220,000, but this valuation is also subject to appeal in this Court (AV97-15). Now the task of the respondent Chief Executive, and indeed that of the Court, in this case is to determine the unimproved value of the subject land as at 1 January 1996. That the best basis of valuation is sales evidence cannot be in dispute. But the only sales evidence involving the sale of a vacant or lightly improved property is that relied upon by Miss Manners. There is a further problem for the appellant. It is that references to relative, or percentage increases in valuation upon the revaluation of a local authority area in appeals of this nature does not constitute a reliable ground of appeal. This is particularly so when, as in this case, there appears to have been a problem with previous valuation relativity in the area, this no doubt brought about by the successful negotiations by Mr Brown with the Valuer-General in 1990. That valuation relativity can be changed is supported by the judgment of the Land Appeal Court in Re: Barnwell v. The Valuer-General (1990-1) 13 QLCR 13 where at p.17 the Land Appeal Court said: “It has been well recognised over the years that previously established relativity in unimproved values can and does change from valuation to valuation. If there was no justification for a change in relativity, the valuer’s task would be very simple in that all that would be required to establish value would be accomplished by the use of an adjusting formula. This, of course, is undesirable.” As I appreciate the evidence on the point, the respondent Chief Executive has, by increasing the valuation of the subject land by a factor of 96%, effectively reinstated fair valuation relativity for the subject land and for sites on the western side of Bede Street, at a level of value supported by the sale of Lot 73. -- 4 of 5 -- 5 In these circumstances, I cannot hold that the valuation of the subject land is excessive or unreasonable. Accordingly the appeal fails, and the unimproved value of Lot 187 on RP 12826, Parish of Bulimba, as determined by the respondent Chief Executive in the sum of $220,000 is affirmed. CH CARTER MEMBER OF THE LAND COURT -- 5 of 5 --