Dobson v Chief Executive, Department of Natural Resources [1997] QLC 20

LAND COURT BRISBANE 19 February 1997 Re: Appeal against Annual Valuation Valuation of Land Act 1944 Valuation Roll No: 2389 Local Government: Caboolture AV96-294 Lesbia CA Dobson v. Chief Executive, Department of Natural Resources D E C I S I O N Background: This appeal relates to a parcel of land at 41 The Boulevard, Bongaree, Bribie Island, described as Lot 24 on Plan B6326 in the local government area of Caboolture Shire. The property is occupied by a single unit dwelling, and is zoned as "Residential A" under the provisions of the current Town Plan of the Caboolture Shire Council dated 12 March 1988. The parcel has an area of 1012 square metres. The Chief Executive, Department of Natural Resources, on 11 March 1996, valued the property at $117,000 with effect from 1 January 1996. The previous valuation at 1 January 1995 was $81,000. Following representations on 1 July 1996, the Chief Executive reduced the valuation from $117,000 to $115,000. Evidence: The appellant argues that the valuation of the subject land is excessive when compared with sales of comparable lands in the near vicinity of the property. The appellant contends that, for whatever reasons that may apply, the Department has failed to provide adequate consideration to the valuations of the properties in The Boulevard area with resulting outcomes reflecting an inconsistency in relativities with other properties. The appellant seeks support for her case in the recent report into Queensland Valuation System "Review of States Valuation System" L Evans, September 1996. The appellant noted among other matters in the review at p.142 that: "similar properties should have similar values. Single property transactions should not be able to significantly alter the index. If statistical techniques are to be used, a smoothing process is needed, discarding [1997] QLC 20 -- 1 of 6 -- 2 both highs and lows and averaging the remainder. " While the above report has little legal significance, the thrust of the appellants case was that, for whatever reasons, the procedures and processes of the Department left something to be desired in arriving at the correct valuation outcomes in some instances. The appellant however was unable to demonstrate that any such lack of rigour had occurred in respect of the land at Bribie Island and, in particular, in respect of the subject land. The appellant confined her analysis of the relevant sales to properties in The Boulevard, and the adjoining areas of South Esplanade, Spowers Street and MacDonald Street. The appellant examined only one sale of vacant land at 45 The Boulevard (Lot 26 on Plan B6326), relying more on comparisons of developed sites to arrive at the unimproved value. The appellant claims that the sale of 45 The Boulevard was an inflated price and did not represent fair market value. The appellant confirmed that her comparison of other parcels was restricted to those with an area of 1012 square metres. During cross-examination there was general agreement with the respondent in respect of the physical characteristics of the land parcels in The Boulevard, and particularly in respect of the type and extent of views from each parcel. The appellant emphasised her contention that the extent of views of Pumicestone Passage were an important component of the valuation of the land "in the eyes of a prudent purchaser". The appellant argued that views from land in South Esplanade were better in that they were unrestricted, while views from The Boulevard were more restricted in that they were "glimpses between mangroves". Where fire or other accidental damage had destroyed mangroves the views were improved but, as the mangroves regenerated, the view deteriorated. Mangroves are a protected species and can not be removed to improve the views. The appellant contended that as views are an important factor in determining the annual valuation, it is unwise to consider the impact of views which may not continue as a consequence of the growth of the mangroves. The respondent agreed that in this case "views of Pumicestone Passage" were an important factor in determining the valuation, but that other factors were also to be considered. The appellant also argued that relativity with adjoining parcels was important and had not been maintained in the valuation of 1 January 1996. The appellant contended that valuations had increased in South Esplanade (12% to 13%), Spowers Street (15%), but The Boulevard had increased from 22% to 44% on average. The -- 2 of 6 -- 3 appellant claimed that this inconsistency was not supported by the evidence of sales of properties in the area. The appellant also argued that the adjoining property at 43 The Boulevard (Lot 26 on Plan B6326) has a valuation only $2,000 more than the subject land when that parcel has a superior view of Pumicestone Passage than the subject land, and that views of Pumicestone Passage were an important factor in determining the valuation. The respondent, during cross-examination, agreed with the appellant that similar properties should have similar valuations, but challenged the use of improved properties as evidence when adequate sales of vacant land within the general area were available. PH Clough v. The Valuer-General - Caboolture Shire (1981-82) 8 QLCR at p.76. The appellant agreed that sales of vacant land were better evidence, but was unaware of suitable vacant land sales in other comparable parts of Bongaree. On cross-examination the appellant, while maintaining that the sale price ($145,000) for 45 The Boulevard was inflated, agreed that the Department had been conservative in applying a valuation of $115,000 to the parcel. Her contention was still, however, that the valuation had not been conservative enough. The appellant agreed that there were more blocks of home units in South Esplanade than The Boulevard and that The Boulevard was more likely to be perceived as a superior residential area. However, the appellant contended that the existence of a caravan park in The Boulevard was a detriment to the area because the movement of caravan park residents was a distraction to residents in The Boulevard. The appellant agreed that the subject land was in a quiet area of The Boulevard except for the caravan park. The valuations in South Esplanade and The Boulevard were about the same quantum in value. The respondent in evidence relied upon three sales of comparable vacant land in the Bongaree area, all within close proximity to Pumicestone Passage. •Sale No. 1 (Lot 398 on RP 180411). Land in Venus Court, Banksia Beach, is several kilometres to the north of the subject land, and is inferior in area (700m2), but has superior access, views and location. ($145,000). •Sale No. 2 45 The Boulevard (Lot 26 on Plan B6326) has an equal area (1012m2) and is one parcel removed from the subject land. The access is slightly inferior but overall is a highly comparable sale to the subject land. ($145,000). •Sale No. 3 Banya Street, Bongaree (Lot 410 on Plan B6321) is the same area (1012m2), is -- 3 of 6 -- 4 comparable in size, topography and access, but overall inferior as it has no views of the Pumicestone Passage. ($110,000). The Department valuer did not consider it necessary to analyse sales of improved properties as it believed that its sales evidence of vacant land covered the range of values of properties in The Boulevard area. In summary, the respondent argued that: (i)Sales of unimproved land are preferred PH Clough supra. (ii)The sale of 45 The Boulevard was inflated and provision has been made to accommodate this in the valuation at $115,000. (iii)The sales evidence provided covers inferior, comparable and superior lands parcels. (iv)While relativity is a matter that impacts the valuations, it can vary as the views become changeable. However, relativity is not the sole criterion and evidence of comparable sales is preferred. NR and PG Tow v. The Valuer-General - Redland Shire (LAC) (1978) 5 QLCR at p. 378. (v)The onus of proof has not been discharged and the valuation of $115,000 should stand. In summary the appellant argued: (i)Relativity is very important and the relativity between the subject land (41 The Boulevard) and the adjoining parcel (43 The Boulevard) is now inconsistent with previous relativities. (ii)It is better to consider sales of improved land that are in close proximity than to consider vacant land sales elsewhere in Bongaree. Decision: In the evidence of the appellant that, for whatever reasons, the Department has not exercised adequate procedures and processes to ensure that the valuations were consistent, I am not convinced that the appellant has any proof of the impact of any such actions upon the valuation of the subject land. Where the appellant has depended entirely upon an analysis of improved properties in the near vicinity, rather than seek alternate sales of vacant land within Bongaree, the evidence would appear to contravene the well established preference for sales of comparable vacant land. • (i)PH Clough v. The Valuer-General - Caboolture Shire - (1981-82) 8 QLCR at p.76; "It has been judiciously laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable -- 4 of 6 -- 5 quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value. The reason is obvious. In applying such sales there is no room for error in analyzing the value of improvements. " •(ii) WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44 at p.46: "The best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land. " •(iii)This was further upheld by the Land Appeal Court in 1992, which agreed with: Hans and Else Grahn v. The Valuer-General (City of Redcliffe) (AV90-472/473), (1992-93) 14 QLCR at p.330: "The appropriate basis for the valuation of a residential lot is not the application of a rate per square metre but an assessment of the unimproved value of each lot as land used for single unit residential purposes. " •(iv)Hans and Else Grahn v. The Valuer-General (AV89-246/247) 13 December 1990 (not reported): "For the purpose of valuing residential sites, the preferred method of comparison is on a site-for-site basis and not the basis of unit area comparison. Site-for-site comparison should take into consideration such matters as the size of the lots, the situation of an access to the lots, the shape and topography of the lots, etc., and comparison on a unit area basis do not necessarily reflect valuation considerations for the above features. " The matter of the impact on the valuation by the existence of views of Pumicestone Passage has generally been agreed between the parties. However, there remains the inconsistency between the parties in respect of whether views which are subject to growth of a protected species such as mangroves, should be considered for use in annual valuations, where the views may be increased or restricted depending upon forces of nature such as fires or regrowth. The relativity within the area surrounding the subject land continues as a matter of dispute, and the appellant continues to be unconvinced about the recent changes to relative valuations between 41 The Boulevard ($115,000) and 43 The Boulevard ($117,000), particularly in respect of the importance of views. However, whilst maintaining relativity is considered of importance, the use of the principle of relativity -- 5 of 6 -- 6 should not be preferred to the exclusion of relevant (even if not ideal) sales evidence. (WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44, at p.46.) A further decision on the significance of relativity is to be found in R and MM Barnwell v. The Valuer-General (1989) 13 QLCR at p.16: "It is desirable that valuations made for the purposes of the Valuation of Land Act 1944 of comparable lands should bear proper relativity, one to the other, so long as the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis. " In considering the weight to be placed upon the sale price for 45 The Boulevard ($145,000), it is generally agreed that the price was not seen to be a true reflection of the market in that area, and a more conservative valuation should be considered. The appellant provided no conclusive evidence to suggest that the valuation of $115,000 was not appropriate for the subject land and, on balance, the range of vacant land sales provided by the respondent supports the current valuation. In this matter the onus of proof is upon the appellant to demonstrate that the valuation by the Department is inaccurate (Brisbane City Council v. The Valuer-General (Shire of Esk) (1977-78) 140 CLR 41: "Unless it can be demonstrated that the Valuer-General, in making a valuation, has acted on a wrong principle or made a serious error of fact, the valuation by the Valuer-General is presumed to be correct." This principle is also expressed in Hans and Else Grahn v. The Valuer-General (LAC) (1992-93) 14 QLCR 327 at p.329: "Because the appellants bear the onus of proof they must provide any sales evidence to demonstrate that the Valuer-General's determination was wrong and that the assessment was correct. " Conclusion After having considered the whole of the evidence, I am not persuaded that the appellant has proven her case. The appeal is dismissed and the determination of the Chief Executive is affirmed. Member of the Land Court -- 6 of 6 --