Caligaris v The Chief Executive, Department of Lands [1995] QLC 21

LAND COURT BRISBANE 31 March 1995 Re: Determination of unimproved value - Valuation of Land Act 1944. Shire of Eacham (AV94-0308) J.J. Caligaris v. The Chief Executive, Department of Lands (Hearing at Atherton) DECISION As at 30th June, 1993, the unimproved value of an allotment in Lakeside Drive, Tinaburra, was assessed by the Department of Lands in the amount of $50,000. The "residential" zoned site is owned by the Council of the Shire of Eacham, and is subject to a lease for a term of 99 years from 1st May, 1987. The registered lessee is Mrs J.J. Caligaris, who acquired the leasehold property including a dwelling, in 1990. The site contains an area of 836 square metres and is described as Lot 17 on RP 808383, Parish of East Barron, County of Nares. The land is physically sound with an easy slope to the rear. Adjoining at the rear is a reserve which accommodates the "Stewarts Gully" inlet of Tinaroo Lake ponded waters and the flood margin above full supply level of the dam. Lakeside Drive is bitumen strip sealed with concrete kerbing and channelling on the southern side. Some 10 residential sites have been surveyed along that side of the road. Town water, electricity, telephone, mail and refuse collection services are provided. The township of Yungaburra is about 3 kilometres to the south. Mrs Caligaris has appealed against the valuation. Through Mr E.J. Caligaris, who among other professional qualifications, is a registered valuer, the appellant contends for a valuation of $30,000. This is not the first time that Mrs Caligaris has contested a valuation of the land in this Court. An appeal against a valuation of $52,000 as at 31st March, 1990, was successful in having the amount reduced to $48,000. Mr Caligaris was responsible for the conduct of that appeal, the decision on which was handed down by myself on 19th June, 1992. Many of the grounds in this appeal have a similar thrust, in that Mr [1995] QLC 21 -- 1 of 4 -- 2 Caligaris sees the immediate locality as being a mediocre residential address, affected by abnormal intrusion of the public - attracted by public park areas and facilities such as a caravan park, boat ramp and picnic areas. In his opinion, the local environment including the narrow street with a pot-holed shoulder, and the strip of leasehold residential development of middle range dwellings and holiday cottages, is indicative of a somewhat unique but not particularly desirable Council development. There have been no property sales in the immediate locality since the previous appeal. Mr Caligaris remains convinced, as he was then, that it is not a realistic valuation exercise to make comparisons between the subject land and sales of land in the prestigious freehold Lakeside residential estate also to the north of Yungaburra. There is no doubt that Lakeview Estate is a superior residential development to Tinaburra. Mr Caligaris seems to think that a comparison between Cairns and Atherton would be somewhat equivalent. He suggests, as assisting his case, that advice received from a local real estate agent to the effect that an outlay of $50,000 (the price at which the Eacham Shire Council has offered lessees the freehold option) would not add $50,000 to the sale price. It is of interest that the agent's written advice (dated 15th February, 1995) also made reference to the "exciting prospect" of marketing the subject Tinaburra house..."with its unique features - of absolute waterfront (when the dam is full) and quality lifestyle in a quiet and cool village environment...". The agent's advice also referred to the negative features of the leasehold property. It is natural that one of the disabilities of the property is seen to be the fact that what may be offered in the marketplace in a sale of the property, is a leasehold, rather than a freehold, interest. For the purposes of valuation under the Valuation of Land Act, the land has been granted in fee simple to the Council and is required to be valued as freehold. The lease reflects an agreement between the Council and the lessee and the conditions of the lease, whether onerous (as Mr Caligaris suggests) or otherwise, are matters which affect the leasehold value of the land - not the freehold value. The appellant has acquired this leasehold property and has paid an amount which includes the leasehold interest in the land. It is logical as the agent advises, that a further payment for the freehold option, without concession for the terms of the lease, would be an imprudent exercise. The lessor, having granted a lease in perpetuity, should, on the other hand, not expect to obtain full freehold value on a sale of the lessor's interest. Apart from the negative features of the leasehold status of the property, Mr Caligaris highlighted the position with the very low level of Tinaroo Lake, with the ponded waters having receded significantly. Stewarts Gully is presently no more than a dry gully. Mr Caligaris says the lake, since June 1992, when the previous decision was handed down, "has fallen to its lowest level on record. There has been no water in -- 2 of 4 -- 3 Stewarts Gully since June 1993." He is concerned that sugarcane growing commenced "in earnest on the Tableland in 1992 and in June 1994 there was some 3,000 hectares under cane which draws irrigation water from the lake...The increased irrigation demands by sugarcane growing may never see the water level in Stewarts Gully inlet reach the levels prior to 1992." Mr Caligaris also referred to a newspaper article dated 11 February, 1995 in which was the news that "Yungaburra residents have been warned to boil all drinking water following tests showing the township's supply is not fit for human consumption." He also advised that "considerable debate exists over the connection of sewerage to Yungaburra and Lakeside. Residents of Tinaburra were told sewerage connection is not proposed for the area." Although Mr Caligaris, being a registered valuer, would be fully aware that the Land Court decision referred to a valuation as at 31st March, 1990 and this appeal refers to a valuation as at 30th June, 1993, his evidence tended to concentrate on changes which had taken place in the period from June 1992 when the earlier decision was handed down and the date of this hearing (21st February, 1995). This is particularly so with regard to the continuing low level of water in the lake. As was the situation at the previous hearing, the valuer responsible for the valuation appealed against was Mr R.G. Moroney. He agreed that there is no recent sales evidence in Tinaburra itself, the most recent sale being of the subject property in late 1990. The nearest sales of vacant freehold land were in the Lakeside Estate, the source of his previous basis. While he agrees that Lakeside is a superior estate, he did not have the valuation difficulty in making comparisons with the subject land as did Mr Caligaris. He provided three sales, one of which enjoyed access and an outlook to an inlet of Lake Tinaroo. That site was of larger size (1,080 square metres) and superior to the subject in so far as its topography and access to the lake is concerned. That land sold on 6th August, 1993 for $75,000 and a valuation of $70,000 had been applied at the same relevant date as here. Other lots which did not have lake access sold for $38,000 and $44,000, both being overall inferior to the subject site, in his opinion. Full details of those sales were contained in his report a copy of which was handed to Mr Caligaris. Mr Moroney stated that he had not changed the relativity between the determination of the Land Court and the levels of value applied at this relevant date, to land in Lakeview Estate. He said that, at the date of valuation, there had been no evidence to support Mr Caligaris's opinion that values had fallen. What has occurred subsequent to the relevant date could not reasonably have been predicted at that date of valuation. Subsequent events, if affecting value, will no -- 3 of 4 -- 4 doubt be reflected in sales of property, and then in subsequent valuations. While to find an increase from $48,000 to $50,000 is somewhat precise, Mr Moroney has followed acceptable principles of valuation in arriving at his valuation. Mr Caligaris is critical of the basis adopted by Mr Moroney, but is unable himself to offer any acceptable basis of valuation for the land. I am unable to find that he has shown that the valuation appealed against is wrong. The appeal is dismissed and the valuation of the Chief Executive affirmed. (RE Wenck) Member of the Land Court -- 4 of 4 --