Austin v Chief Executive, Department of Natural Resources [1997] QLC 65

LAND COURT, BRISBANE 12 May 1997 Re: Determination of Unimproved Value - City of Brisbane - Division of Moggill - (V96- 719) Peter Austin v. Chief Executive, Department of Natural Resources (formerly Department of Lands) D E C I S I O N This appeal lies against the determination by the Chief Executive, Department of Natural Resources, of a general valuation of $140,000 for a 2 hectare parcel of land situated at 440 Mt Crosby Road, Anstead, and which is more particularly described as Lots 3 and 4 on RP 868638, Parish of Moggill, County of Stanley. The relevant date for the determination of the unimproved value is 1 January 1996. The land has been valued by the respondent Chief Executive under the protective provision of section 17(1) of the Valuation of Land Act 1944, as a rural homesite, since it was considered by him that the land was being used during the relevant period exclusively for the purpose of a single dwelling house. The appellant contends within the Notice of Appeal for an unimproved value of $110,000. The sole ground of appeal reads: " Lack of relativity with surrounding unimproved values. " Valuation evidence was provided by the appellant, Peter Austin, who is a registered valuer, and by Uday Singh, who is a registered valuer in the employ of the respondent Chief Executive. There is a preliminary point upon which the Court should make a finding prior to considering the case on the merit of the valuation evidence. It is whether the respondent Chief Executive correctly valued the land as a rural homesite under the provision of section 17(1) of the Act, or whether he should have valued it as for its highest and best use. By now it is well established that the period during which it is competent for the Court to consider whether activity on land calls for it to be valued under the provision of [1997] QLC 65 -- 1 of 5 -- 2 section 17 of the Valuation of Land Act commences on the relevant date for the valuation (in this case 1 January 1996) and ends on the date of issue of the valuation (in this case 13 August 1996). There are two conforming judgments of the Land Appeal Court in support of this proposition. The most recent is that in Re: Appeal by Landholder against Determination of the Valuer-General - Shire of Noosa (1983) 9 QLCR 35 where at p.36 and 37, the Land Appeal Court said: " 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 valuation (31st March, 1980) and the date of the issue of the valuation (12th February, 1981). We are unable to have regard to anything that has occurred since that date. If now or in the future Mr McMurray feels that his activities are such that they establish the business of primary production within the meaning of section 11(1)(vii) of the Act, he has the right to make application to the Valuer-General to reconsider the valuation. " Section 11(1)(Vii) of the Valuation of Land Act 1944 has been repealed. The operative relevant section in the current Act is section 17. Insofar as it is relevant, section 11(1)(vii) of the repealed Act, which was the appropriate legislation in the cited case, reads: " In making, pursuant to this sub-section, the valuation of the unimproved value of land exclusively used for the purposes of a single dwelling house or for purposes of the business of primary production, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivision or any other purposes shall be disregarded irrespective of whether or not, in the case of potential use as aforesaid, that potential use is lawful when the valuation is made. " Again in so far as it is relevant, section 17(1) of the current Act, under which the disputed valuation is made in this case, reads: " In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded, irrespective or whether or not, in the case of potential use as aforesaid, that potential use is lawful when the valuation is made." There is only minimal alteration to the wording of the relevant sub-sections and this does not constitute an estoppel to the application of the findings of the Land Appeal -- 2 of 5 -- 3 Court in this case. Further, that the Land Appeal Court was concerned with the "business of primary production" does not, in my view, prevent its findings from having application when the valuation involves valuing land used exclusively for the purposes of a single dwelling house. I turn now to the evidence in this case relative to the aforementioned preliminary point. During the hearing of evidence in the matter, it occurred to the Court that during the relevant period, it might well have been that it was not appropriate for the Chief Executive to have valued the land under section 17(1) of the Act. As a result, acting under the powers vested in the Court under the provision of section 41(2) of the Land Act 1962, I elicited the following evidence from the witnesses: Mr Singh said that at the time of making the valuation, he was under the impression that there was erected upon Lot 3 on RP 868638 an old dwelling house. Accordingly, he extended the protective provisions of section 17(1) to his valuation of the land. However, Mr Austin outlined the history of the development of what was formerly a much larger parcel (4 hectares) of land in his ownership fronting Mt Crosby Road of which the subject parcels formed part. Mr Austin subdivided this larger parcel into four lots each with an area of 1 hectare. There was an old original dwelling house on the parent parcel and after survey, this house was located on Lot 2 on RP 868638. Mr Austin located on Lot 1 of RP 868638 a removal dwelling house and sold Lot 1 on 12 December 1994. After renovating the old house on Lot 2, he sold that parcel on 14 March 1996. Mr Austin then commenced building a new dwelling house on Lot 4 on RP 868638 (part of the subject land). The construction of this house is by now complete enough for Mr Austin to take up residence. He told us during evidence that he began occupying the new dwelling house "one week ago". I adopt the evidence of Mr Austin in preference to that of Mr Singh, but I hasten to add that I can readily appreciate that Mr Singh could have so easily fallen into error insofar as the location of the old dwelling house is concerned in view of the widely recognised pressure under which Departmental valuers now operate. Now it is clear that there was, during the period with which I can consider whether -- 3 of 5 -- 4 the land falls to be valued under the provision of section 17(1) of the Act, viz. 1 January 1996, and 13 August 1996, a dwelling house under construction, but for the valuation to be made under section 17(1), it must have been "exclusively used for the purpose of a single dwelling house". In these circumstances, then, I must find that the land does not fall to be valued under the protective provision of section 17(1) of the Valuation of Land Act. In the event that this finding would most probably be the outcome of my deliberations, I then proceeded, again in accordance with the powers of the Court (section 41(2) of the Land Act 1962) to elicit such evidence from the valuers as would enable me to make a finding as to the appropriate unimproved value for the subject land on the basis of its highest and best use as two separately surveyed sites. The subject land comprises two adjoining hatchet shaped 1 hectare parcels each with long access links to Mt Crosby Road. These access links cross a watercourse near the road frontages and the sites are encumbered near the frontages by a powerline easement. The rear land on each of the sites (the building sites) is of medium elevation falling gently from the southern boundary to the north and east. Mr Singh says the elevation provides a good outlook from potential house sites to the north and north-east. On this evidence it is clear that the highest and best use value of the subject land would be represented by its value as two individual rural homesites. After commenting upon a number of homesite sales in the area, Mr Austin is of the opinion that each of the subject lots should be valued as rural residential lots at $100,000. Mr Singh would value Lot 3 on RP 838638 on this basis at $115,000 and Lot 4 on the same basis at $110,000. Mr Singh would allow a 5 percent (5%) deduction from the aggregate value of $225,000 for what he calls "bulk holding". In the end, then, Mr Singh would value the subject land on the basis of its highest and best use as two separately surveyed lots at $213,750 or, say, $214,000. There is virtually no means whereby I could conclude as to which of the valuers' estimates is nearer fair market value, particularly in view of the proximity of their assessments, and given that valuation is not recognised as an exact science. Mr Singh relied as a basis for his valuations on the evidence of some three sales as are tabulated in his valuation report. Details are in the hands of the parties for reference. Mr Austin also made comparisons in evidence between the subject sites and -- 4 of 5 -- 5 sales sites in Jacqueline Place, which is an estate of 1 hectare sites on the opposite side of Mt Crosby Road from the subject land. He referred to sales of Lot 2 on RP 892426 on 9 July 1996, for $117,500, to Lot 3 on RP 892426 on 7 March 1996, for $106,000, and to Lot 8 on RP 892425 on 4 November 1996, for $107,000. It is to be noted that all three of these sales took place after the relevant date for the valuation under appeal. It is also to be noted that one of the sales upon which Mr Singh relies (Sale No 1) is also located in Jacqueline Place. It is Lot 12 on RP 892426 containing an area of 1 hectare which sold on 2 August 1995 (prior to the relevant date) for $165,000. Mr Singh analysed this sale to show an unimproved value of $160,000. He applied an unimproved value of $145,000 to this site for the 1 January 1996 relevant date annual valuation. I am not influenced in this decision by unimproved value relativity evidence furnished by Mr Austin and which was a ground of appeal relied upon by him as a basis for his revised value of $100,000 for the subject land. This is so in view of my finding that the land falls to be valued as for its highest and best use as two separately surveyed rural homesites, and the comparison properties are, for the most part, rural homesites occupied and valued as such. In all the circumstances, I find a fair unimproved value of the subject parcel on the basis of its highest and best use results from the application of a valuation of $110,000 to each site, adjusted as did Mr Singh, by a bulk holding allowance factor of 5 percent. This, of course, results in an increased determination of unimproved value for the subject land over that against which the appeal was lodged. However, when determining appeals under the Valuation of Land Act, the Court is empowered to increase values in accordance with the provision of Section 66(b) of the Act. In the result then, the appeal is dismissed, the determination by the Chief Executive is set aside, and the unimproved value of Lots 3 and 4 on RP 868638, Parish of Moggill, as at the relevant date of 1 January 1996, is determined in the rounded off sum of Two hundred and ten thousand dollars ($210,000). Member of the Land Court -- 5 of 5 --