Anthony v Chief Executive, Department of Lands [1997] QLC 366

[1997] QLC 366 Re: Appeal against a valuation Valuation Roll No: 872/50000 Local Authority: BCC-South Brisbane (AV95-431) MJ Anthony and D Anthony v. Chief Executive, De partment of Lands DECISION LAND COURT, BRISBANE 14 February 1997 Michael John Anthony and Demetra Anthony are the owners of a property described as Lot 10 on Registered Plan 218258, in the Parish of South Brisbane, County of Stanley, having an area of 1021 square metres and being located at 90 Vulture Street, West End. Pursuant to the provisions of the Valuation of Land Act 1944, the unimproved value of the land was determined by the respondent as at 1 January 1995, to be $325,000. The appellants objected to that valuation, the objection was disallowed and the appellants have appealed to this Court contending that the valuation of the land should be $275,000. The ground on which the appellants have appealed to this Court is that "relativity with other valuations in the area has not been maintained". Mr Michael John Anthony, a solicitor, and one of the appellants, appeared and gave evidence on behalf of the appellants: Evidence was given on behalf of the respondent by Mr John Mauchline, a registered valuer employed by the respondent. Before considering the evidence relating to the grounds of appeal, it may be useful to state briefly the relevant principles of law. -- 1 of 5 -- 2 In Grahn v. The Valuer-Geheral (1992) 14 QLCR 327, the Land Appeal Court summarised the effect of earlier authority as follows: 11 (a) 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 l(?ng 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. (b) The best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land. (c) Section 13(7) of the Valuation of Land Act 1944 creates a presumption that the value in money terms shown by the Valuer-General in his notice of valuation is correct. [Section 13(7) is now section 33 in reprint No. 2 of the Valuation of Land Act.] (d) Once it is shown that: (1) in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact; or (2) the valuation was made by a method fundamentally erroneous, the presumption created by section 13(7) is rebutted. (e) Whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence. (f) If possible, the Valuer-General should obtain uniformity between different blocks in the same land category or type but should do so (preferably by reference to sales of comparable land) by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error. 11 (References to the authorities relied by the Land Appeal Court have been omitted in this quotation.) In support of the appellants' argument that the valuation under appeal was out of relativity with other valuations of land in the area, the appellants relied specifically on a comparison between the subject land and three other blocks of land. The approach adopted by Mr Anthony was to convert the valuations of the selected properties into a rate per square metre and to compare the valuations of the respective properties accordingly. -- 2 of 5 -- l On this basis, the subject property was valued as at 1 January 1995, at $325,000 or $318 per square metre. A property situated at 209 Boundary Street, West End, was valued at $290,000 or $288 per square metre as at 1 January 1995. Another property situated at 72 Vulture Street was valued at $105,000 or $364 per square metre at 1 January 1995, and a property situated at 109 Vulture Street was valued at $210,000 or $290 per square metre as at 1 January 1995. Mr Anthony argued that valid comparisons could be drawn between the subject property and these properties on the basis that they are all equidistant from the heart of West End, that they have similar zoning, i.e. they are zoned "Local Business" (with the exception of the subject property which may have a "Special Use - Professional Offices" zoning which in his opinion is more restrictive than the other properties) and they are all within the same Precinct under the West End Development Control Plan. Relying on the similarity between the properties, Mr Anthony then submitted a fairly lengthy analysis which led him to the conclusion that the value of the subject property should be in the $220 to $250 per square metre range and that $318 per square metre was far too high for the subject property. It is not necessary to go through Mr Anthony's reasoning in detail because as will be seen shortly, there was serious doubt raised by the respondent's evidence as to whether the sites were sufficiently comparable to enable a valid relativity exercise to be carried out. The major difference between the parties as to the comparability of the properties concerned the zoning and use of each of the lots. At the outset it should be noted that the evidence given relating to these issues was fairly sparse and to some extent contradictory. In relation to the property at 209 Boundary Street, Mr Mauchline gave evidence that substantial concessions had been made by the Chief Executive in respect of the unimproved valuation of that property because of the unusually high costs associated with the development of the property. The high costs were incurred, he said, in consequence of the conditions imposed by the Brisbane City Council in granting Special Development Approval for the property. The valuation figure of $288 per square metre took into account some, but not all, of those costs and the movement in the market. Mr Mauchline said that the $288 per square metre does not reflect the true vacant land value. The effect of this -- 3 of 5 -- 4 evidence is somewhat equivocal. There is by no means sufficient material before the Court to rebut the presumption which arises under s 33 of the Valuation of Land Act 1944 that the valuation is correct. It has not been shown that the Chief Executive acted upon a wrong principle or made a serious error of fact, or that the valuation was made by a method that was fundamentally erroneous. Accepting that the valuation is soundly based, Mr Mauchline's assertion that the valuation does not reflect the true vacant land value must be rejected. There do seem to be significant differences in the uses to which the properties may be put under the relevant town planning provisions. 209 Boundary Street is not in Precinct 7 as indicated by Mr Anthony but is in fact in Precinct 13. Again, the evidence was not complete as to the precise difference between the two precincts but it appears that Precinct 13 allows low rise residential development, whereas Precinct 7 comprises the West End Shopping Centre. The matter is further complicated by the fact that, as noted above, Special Development Approval was given in respect of 209 Boundary Street allowing a commercial development comprising shops, offices and home units. The subject property also has Special Development Approval which permitted the construction of a two storey office building with basement car parking. In the face of these differences, it is difficult to regard the two properties as comparable for the purposes of establishing their relative values. The second property relied on by Mr Anthony was 72 Vulture Street. Mr Mauchline gave evidence to the effect that the difference in the valuations of 72 Vulture Street and the subject property is accounted for by the fact that 72 Vulture Street is a corner property whereas the subject property is an inside lot. Mr Anthony argued that the valuation of 72 Vulture Street should be halved in order to reach a true comparison with the appropriate value to be applied to the subject property because there is twice as much building on 72 Vulture Street as there is on the subject property. No evidence was given as to why there is a difference in the building coverage on each lot. The mere fact that the properties carry different improvements is not relevant in itself to establishing the unimproved value of the subject land. As it stands, the valuation of 72 Vulture Street is considerably higher than that of the subject land and does not support an argument that the valuation of the subject land is too high. The third property relied on by Mr Anthony, namely that at 109 Vulture Street, comprises an old timber building which has been converted into flats. Mr -- 4 of 5 -- 5 Mauchline said that this property was a Residential B site and had been valued on that basis. This evidence is in conflict with that of Mr Anthony who said that all the properties were zoned "Local Business". I prefer the evidence of Mr Mauch line in this regard and on that basis have come to the conclusion that 109 Vulture Street, being a Residential B site, is not comparable with the subject property. In support of the valuation, the respondent relied on one sale only. The sale property is located at 68 Vulture Street, West End, and has an area of 948 square metres. The property is zoned "Warehouse/Transport". The property was sold on 1 November 1993 for $330,000, it has an analysed sale price of $329,000 ($347 per square metre) and an applied value of $285,000 ($300 per square metre). Mr Mauchline said that he considered the sale property to be inferior to the subject property. Although the sale property is zoned differently from the subject property there was no evidence before the Court as to any differences this might cause in the respective values of the properties. Mr Anthony did not challenge the sales evidence. Nor did Mr Anthony adduce any sales evidence of his own. He relied solely on the relativity argument which has been discussed at length above. The conclusion I have come to is that the appellants have not established that the valuation of the subject land is out of relativity with the valuations of surrounding properties and have therefore not discharged the onus placed on them by s 45(4) of the Valuation of Land Act 1944 of proving the ground of their appeal. In the circumstances the appeal is dismissed and the valuation of the Chief Executive is affirmed. (CA McDonald) Member of the Land Court -- 5 of 5 --