Crisp v Chief Executive, Department of Natural Resources [1997] QLC 62

LAND COURT, BRISBANE 12 May 1997 Re: Determination of Unimproved Value - Gold Coast City Council. (AV96-153). JE and BV Crisp v. Chief Executive, Department of Natural Resources (formerly Department of Lands) D E C I S I O N John Edward and Bernice Valerie Crisp have appealed against the determination by the respondent Chief Executive of an unimproved value of $480,000 for a 1137 square metre parcel of land situated at the end of a cul-de-sac at 38 Buccaneer Court, Paradise Waters. The land is more particularly described as Lot 205 on RP 139180, Parish of Gilston, and is a canal frontage site. It is zoned "Residential Dwelling House" under the provisions of the Gold Coast City Council Town Planning Scheme which was effective as at the relevant date of valuation, viz. 1 January 1996. The appellants contend within the notice of appeal for an unimproved value of $400,000. John Edward Crisp informed the Court that, in his view, the valuation under appeal, or even for that matter a value of $435,000, for the subject land is excessive, especially as the increase in the valuation since it was previously valued (presumably as at a relevant date of 1 January 1995) equates a factor of 11%. This he says, is excessive when weighed against a statement released by the Real Estate Institute of Queensland on 1 March 1996, indicating that real estate sale prices on the Gold Coast during the calendar year 1995 had decreased by a factor of 2.3%. Mr Crisp referred the Court to a number of property sales within the Paradise Waters development which, he suggests, shows that an unimproved value of $480,000 for the subject land is quite excessive. Details as to the sale prices of the properties, or the asking prices for the properties, have been obtained by Mr Crisp from a local real estate agent. He has nominated the following comparison sales and/or listed properties which all have canal frontages: (a) - 27 Buccaneer Court - house and land located three doors from the subject property sold 2½ years ago for $400,000. (b) - 26 Buccaneer Court - house and land sold in January 1997 for $475,000 - situated 60 metres from the subject property. Improvements comprise a 45 square house, pool and jetty. Mr Crisp, who is a retired builder, estimates the conservative replacement cost of the house to be $225,000 - leaving a land and jetty price of [1997] QLC 62 -- 1 of 3 -- 2 $250,000. (c) - 28 Buccaneer Court - house, land, jetty and pool for sale for $600,000. House is huge - about 50 squares. After allowing for building costs, Mr Crisp suggests the land value reflected in the listed price is $350,000. (d) - 2 Buccaneer Court sold at the end of 1996 for $360,000. Improvements comprise a 3-bedroom home with pool and double garage. Mr Crisp estimates the improvements on this site to be worth $150,000 - leaving a value of $210,000 for the land. (e) - 52 Commodore Drive (next to 2 Buccaneer Court) sold at the end of 1995 for $365,000. Mr Crisp says this property had been listed for sale for $440,000 - it is improved with a 4-bedroom home and pool and Mr Crisp says the property has direct views to Surfers Paradise. Summarising his evidence, Mr Crisp is at a loss to understand how the Chief Executive can value the appellants' land at $480,000 when a perfectly good house, land, pool and jetty within 60 metres of the subject land (26 Buccaneer Court) can be purchased for less than this valuation.. The valuation under appeal was made by registered Departmental valuer, Shane Raymond Stirling Montgomery. Mr Montgomery says that, in comparison with many other sites in Buccaneer Court, the subject land has many advantages. It is comparatively larger than most other sites, the exception being the neighbouring parcels at the end of the cul-de-sac. It has a larger than normal canal frontage (43.372 metres) but a relatively narrower road frontage of 10.079 metres. It, like the other sites in Buccaneer Court, is predominantly level, level with the road and well drained. It has a south-east aspect and good views to the Surfers Paradise skyline. Mr Montgomery has made the valuation of the subject land having regard to three sales of vacant canal frontage sites, one of which is situated in Buccaneer Court (No 24). Each of the sale sites is zoned "Residential Dwelling House". Details as to the dates of sales, sale prices, sale analyses to showing unimproved value (improvements valued on each sale site are a canal revetment wall and pumped fill) and the unimproved value applied to the sale parcels as at the relevant date of 1 January 1996. This information is in the hands of the parties for reference and I do not propose to include details of it in this decision. Mr Montgomery told us he was the valuer responsible for all the valuations in the area for the 1 January 1996 relevant date valuation. He looked at all the sales which took place prior to the relevant date for the purpose of gauging any movement in property values. Mr Montgomery outlined in evidence, and in some detail, as to how he saw the comparison between the subject land and his basic sale sites. Suffice it to say that he has satisfied me that his opinion as to the -- 2 of 3 -- 3 comparisons, as set out in his tendered sales schedules, seems reasonable. Mr Montgomery confirmed in evidence that No. 27 Buccaneer Court did sell in January 1993, at which time, he submitted, the real property market on the Gold Coast was in the depth of recession. He says that the market has improved considerably since that time, especially in prestige areas which, by inference, are such as where the subject land is situated. An alternative view of the market trend was taken by Mr Crisp who told us that the market for real estate in the subject area has been fairly stable and depressed since 1993. Mr Montgomery offered a general comment that the analyses of sales of improved properties (house and land) in prestige areas involves the difficult exercise of assessing the added value of the improvements. I agree this is so, and obviously the best basis for valuation is sales of unimproved, or lightly improved, properties. There is ample judicial precedent to support this opinion. Now I can understand the concern expressed by Mr Crisp about the valuation of the appellants' land based on his evidence, but he has not convinced me that the onus of proof has been discharged, as it must be in accordance with the provisions of s.56(2) of the Valuation of Land Act, in that a valuation of $480,000 for the subject land, assuming it to be unimproved, as at the relevant date of 1 January 1996 is excessive or unreasonable. This is especially so in view of my previous remarks as to the preferred status of lightly improved sales evidence, and that Mr Crisp relies for his contention on highly improved sales evidence. Further, it has often been held in this jurisdiction that increases in value upon the revaluation of lands within a local authority area is not a valid ground of appeal. What is to be determined is the unimproved value of land as at a specific relevant date, and this is best related to comparable sales evidence. Again, offers for sale of property are not a reliable guide to value. It is the value reflected by concluded sale contracts which is to be used as a basis for valuation. In these circumstances, then, the appeal must fail. Accordingly, the determination of the unimproved value of Lot 205 on RP 139180, Parish of Gilston, as made by the respondent Chief Executive in the sum of $480,000 is affirmed. Member of the Land Court -- 3 of 3 --