Bogiatzis v Chief Executive, Department of Natural Resources [1997] QLC 70

LAND COURT, BRISBANE 22 MAY 1997 Re: Appeal against Valuation - Valuation of Land Act 1944 - City of Townsville. (V96- 512). Mark Michael Bogiatzis and Samantha Bogiatzis v. Chief Executive, Department of Natural Resources (Hearing at Townsville) D E C I S I O N Mr and Mrs Bogiatzis are the owners of land described as Lot 170 on Crown Plan 889739, Parish of Coonambelah, containing an area of 791 m². Under the provisions of the Valuation of Land Act 1944, as at 1 January 1996, the respondent Chief Executive determined the unimproved value of that land at $133,000. Following an objection by the owners against that valuation, the respondent reduced it to $130,000. The owners then appealed against that decision on their objection, advising that their estimate of unimproved value was $115,000. The property is situated at 107 Yarrawonga Drive, North Ward, an inner city suburb approximately 2 km north-west of the Townsville City Centre. Yarrawonga Drive is a bitumen- sealed roadway with concrete kerbing and channelling. The subject land is zoned "Residential 1" under the City of Townsville Town Plan and is presently vacant land. Electricity, telephone, town water and sewerage services are available to the land. The land is above street level and rises to the rear boundary, with panoramic, but partially restricted views of Cleveland Bay and the Port of Townsville. Mr GW Eales, a registered valuer in private practice in Townsville, appeared and gave evidence on behalf of the appellants. Mr D Grealy appeared on behalf of the respondent, while valuation evidence for the respondent was given by Mr RA Noakes, a registered valuer employed by the Department of Natural Resources. Mr Eales valued the subject land at $115,000, while Mr Noakes gave evidence in support of the unimproved value at $130,000. There was little difference between the valuers in the description of the land, both admitting that it was situated in a prestige area of the suburb of North Ward, locally known as Yarrawonga. There was also little difference between them as to the views that could be obtained from the subject land, although Mr Noakes felt the views to be more extensive than did Mr Eales. [1997] QLC 70 -- 1 of 4 -- 2 Mr Eales relied principally for his basis of valuation upon the sale of the subject land for $115,000 on 30 October 1995, just two months prior to the date of valuation. Mr Eales had investigated that sale and considered it to be an arm’s length transaction. Mr Noakes rejected that sale as a basis of valuation, explaining that the land had previously been the subject of a contract between the vendor, Yarrawonga Pty Ltd and J and E Markov, in August 1995, for $135,000. However, for reasons that were not explained, that sale did not proceed. The appellants purchased the subject land some two months later for $20,000 less than the earlier contract price. Mr Noakes went on to explain that his investigations had revealed that at the time Yarrawonga Pty Ltd was suffering some financial and cash flow problems. He felt that the land had sold below its true market value. For that reason he disregarded the sale for $115,000 and, while not relying upon the previous sale, he felt that at $130,000, the unimproved value was more in keeping with the market as disclosed by other sales. The valuers had several sales in common. The property at 386 Stanley Street, North Ward, containing 1,200 m², sold in March 1995, for $115,000. That property is situated close to the subject land, but is slightly less elevated, with a similar slope upwards from the road frontage. It was generally conceded that the property would have less extensive views than the subject land because of its lower elevation. The property situated at 345 Stanley Street, North Ward, containing 1,205 m², zoned "Residential 3", sold in May 1995, for $150,000. That is also an elevated property set in a prestige area and falls from street level to the rear, providing panoramic views of the ocean. However, it has difficult access from the street. Both valuers agreed that the sale property is superior to the subject land. The property situated at 7 Braemar Crescent, Castle Hill, containing 1,251 m², zoned "Residential 1", sold in December 1995, for $165,000. Both valuers agreed that the sale property is vastly superior to the subject land, as it has extensive island and ocean views. However, it falls steeply from the street frontage to the rear, making it a difficult site upon which to build. Mr Noakes referred to two other sales. The property at 169 Eyre Street, North Ward, containing 503 m², sold in May 1995, for $70,000. It is a regular shaped, level, inside allotment at street level, with a southerly aspect and no views. Mr Noakes said that he included that sale to give an indication of what he thought was the “absolute minimum level of value”. The other sale was a property situated at 380 Stanley Street, North Ward, containing 1,202 m². It sold in August 1996, for $110,000. Mr Noakes described it as an inside allotment in an elevated prestige locality. The property is intersected by a gully and has partly restricted panoramic sea views. That sale took place some eight months after the relevant date, but Mr Noakes felt that it was relevant as there had been no discernable change in the market between the two dates. However, as Mr Noakes applied an unimproved value of only $75,000 at the relevant date, I cannot place much reliance upon that sale. Mr Eales also provided details of a number of other sales. The properties situated at No. -- 2 of 4 -- 3 3 and No. 7 Woodlands Court, with areas of 1,283 m² and 1.053 m², sold in August 1995, and July 1995, for $80,000 and $70,000 respectively. These were, at the dates of sale, vacant residential allotments, situated above street level but sloping, with restricted views. Although they are located near the subject land, they are on an opposite slope and do not provide much assistance in deriving the unimproved value of the subject land. The property at 183 Denham Street, North Ward, containing 1,502 m², sold in July 1995, for $85,000. Mr Eales described that land as a vacant rocky allotment with restricted two-street frontage, “sloping steeply up to the eastern Denham Street frontage”. However, the land is zoned "Special Purposes" and that sale is of no assistance in arriving at the unimproved value of the subject land. The essential issue between the two valuers is whether or not regard should be had to the sale of the subject land to the appellants in October 1995. Mr Eales is of the opinion that the sale provides the best basis for the unimproved value. Certainly, provided that the sale is the result of arm’s length negotiations between willing but not overanxious partes, there could be no better basis for the valuation than the sale of the subject land only two months prior to the date of valuation. However, Mr Noakes concluded after investigating the transaction that it represented something less than market value at the date of valuation. Although he was careful not to rely upon the contract for the sale of the land in August 1995 which did not proceed to completion, he felt that the level of that contract price was a better indicator of market value than the actual sale price. In support of that conclusion, he particularly referred to the sales at No. 386 Stanley Street and at No. 345 Stanley Street. He said that No. 386 was less elevated and therefore enjoyed less extensive views and in his opinion was inferior to the subject land. On the other hand, No. 345, being higher in elevation, had better views and was a superior property. However, although No. 386 sold for $115,000, Mr Noakes applied an unimproved value of only $100,000 to that property at the relevant date. Therefore, although he purported to rely upon the sale, his real comparison must be between the unimproved value applied to the sale property and the unimproved value applied to the subject land. In the circumstances, a difference of $15,000 between the sale property at $100,000 with its larger area of 1,200 m² and an unimproved value of $115,000 on the subject land would seem reasonable relativity. Indeed, Mr Noakes conceded that the subject land was not superior to the subject land to the extent of $30,000. On the other hand, Mr Noakes applied an unimproved value of $145,000 to No. 345, only $5,000 less than its sale price of $150,000. Both valuers agreed that the sale property is superior to the subject land because of its elevation and views. Having regard to its larger area, I can see nothing wrong with the relationship of unimproved values between the subject land at $115,000 and the sale land at $145,000. The other sales produced by the valuers are of only limited assistance and do not help to -- 3 of 4 -- 4 resolve the problem as to whether the sale of the subject land should be applied. Having regard to the whole of the evidence, I can see no reason for rejecting the sale of the subject land only two months prior to the date of valuation. In arriving at that conclusion, I have had no regard to the conflicting hearsay evidence of the information conveyed to the valuers by employees of the agents, Ferry Real Estate. Although this Court is not bound by the strict rules of evidence, where each party relies on hearsay evidence and each version of that evidence is in conflict with the other, the only safe course is to reject it entirely. Having regard to the relationship of unimproved values applied to other lands in the vicinity, I am of the opinion that an unimproved value of $115,000 is not out of relativity with the unimproved values applied to those lands. Therefore, the appeal is allowed, the valuation of the Chief Executive is set aside, and the unimproved value of the subject land is determined at One hundred and fifteen thousand dollars ($115,000). JJ TRICKETT PRESIDENT OF THE LAND COURT -- 4 of 4 --