Callinan v Chief Executive, Department of Lands [1994] QLC 273

[1994] QLC 273 ;r""•··'"·. ,_, # ,. WWW .M , · ,, ... ., :~ ., Re: Appeal against Annual Valuation Valuation of Land Act 1944 City of Ipswich (AV93-262) Martin J Callinan and Valda J Callinan v. Chief Executive. De partment of Lands (Hearing at Ipswich) DECISION LAND COURT BRISBANE 29 JULY 1994 Mr and Mrs Callinan have appealed against the unimproved valuation of $27,500 applied by the respondent as at 31st March, 1992, to their property situated at 22 Hooper Street, West Ipswich. This property, described as lot 1 on Registered Plan 40189, Parish of Ipswich, County of Stanley, has an area of 1,315 sq. metres and is zoned "Future Industry" under the City of Ipswich Town Planning Scheme. However, it is used for single unit residential purposes. Mr and Mrs Callinan have estimated that the unimproved value of the land should be $18,500. Their grounds of appeal refer to nearby properties which have been for sale for some years and yet have not sold. They do not see how the valuation could increase 50 per cent over the previous valuation as facilities in the area have not improved, in fact they are getting worse. They state that in the present economic circumstances, nobody would pay $27,500 for the property if it was unimproved. Mr Martin Callinan appeared and gave evidence on behalf of the owners. Valuation evidence on behalf of the respondent was given by Mt John Richard Lechel, registered va luer, employed by the Department of Lands. Mr Lochel's report describes the land as being slightly below street level at its '- -- 1 of 8 -- 2 frontage, with a gentle fall to the south-west for approximately 55 metres from the frontage to a steep embankment which falls into a flood plain of the Bremer River. It has a southern outlook over the sports grounds on the southern bank of the river. Mr Lechel states that the subject land is situated in a small residential area of pre-war and post-war houses, located immediately to the south-west of an industrial and commercial area. It is approximately 2 kilometres south-west of the Ipswich Post Office. Hooper Street is a full width bitumen carriageway with rolled bitumen gutters and affords good access to the site. Water, sewerage and electricity are available to the property. Mr Callinan tendered a well documented statement to the effect that the property is in a declared flood area, which flooded in 1974 and again in 1991. He said that the Ipswich City Council has not approved any new housing development in the area since 197 4. He understands that the flood waters in that year came to the window sill of the house, a height of about 2 metres. Mr Callinan referred to vacant blocks of land in the vicinity, situated in Warrell Street and Keogh Street, which have been for sale for some time and which have not sold. Two of these allotments in Keogh Street were purchased in November 1991 and January 1992 for $20,000 each . As these are the only two sales in the area, he questions why the subject land should be valued at $27,500. The local environment was described by Mr Callinan thus: " There is a sawmill that commences operation at 6:00 a.m. every day of the week except Sunday, a trucking business and depot that operates 7 days a week at any hour, a fruit market with its heavy truck going past our door 5 days a week and a hotel with all the noise, rowdiness and disturbances associated with such a business." He adds that these industries are a constant barrage on their senses and make their property less desirable to potential purchasers than those in quieter areas. , -- 2 of 8 -- 3 Mr Callinan goes on to add that the Ipswich City Council recently approved a glass and metal recycling business approximately 150 metres from the subject land. Tests indicate that this enterprise will add considerably to the noise in the area. Mr Callinan said that the Ipswich City Council has also approved a development for general industry less than 100 metres from the subject land. The developer has informed residents that he will be constructing a 5 metre high brick wall as part of this development, which Mr Callinan thinks will be an eyesore in plain view of his land. In December 1991 Mr Peter Beasley, registered valuer, valued the subject property for finance purposes at $72,500. Mr Callinan produced a certificate of valuation showing Mr Beasley's apportionment of the valuation as land $18,000 and improvements $54,500. Mr Callinan estimates that the improved value of the property could have risen to $79,315 (based on the estimate of the President of the REIQ of median prices for houses in Ipswich over the last 15 years), and estimating that the house would cost $63,250 to replace, the residual unimproved value would be $16,065, compared with the $27,500 applied by the respondent. The area was not a prestige one, Mr Callinan said, it was an area where people had bought because it was cheap. Those trying to profit by buying and selling had failed. As the land is zoned "Future Industry" and is used for single unit residential purposes, Mr Lochel valued the land under section 11 (9) (formerly section 11 (1 )(vii)) of the Valuation of Land Act 1944. This section requires that where land is being exclusively used for purposes of a single dwelling-house, any enhancement in value that the land has for some higher use must be disregarded. Therefore, Mr Lechel has disregarded its industrial value and has valued it as if it were zoned "Residential". \_ -- 3 of 8 -- 4 In arriving at his valuation of $27,500, Mr Lochel had regard to sales of properties situated in "Residential A" areas of Ipswich. His Sale No. 1 is situated in Bremer Street, has an area of 683 sq. metres and sold in November 1991 for $24,000. Mr Lochel analysed this sale to show an unimproved value of $23,000 and applied a valuation of $22,000 in the 1992 valuation. Mr Lochel said Bremer Street is a bitumen strip carriageway with earth shoulders and no formed gutters. The sale allotmert is slightly above street level at its frontage with a gentle rise to the south. It has a low to medium elevation and was totally flooded in 1974. The surrounding development is well-established residential, mostly post-war timber homes. It has restricted outlook to the north-west across the Bremer River. The sale is located approximately 3.2 kilometres north-east of the Ipswich Post Office and, has similar services to the subject land. He considers it to be inferior to the subject land because it is smaller and situated further from the Central Business District. Mr Lochel's Sale No. 2 is in Peacock Street, Leichhardt, and has an area of 741 sq. metres, zoned "Residential A", which sold in March 1992 for $25,000. Mr Lochel analysed this sale to show $24,400 and applied an unimproved value of $23,500 in the 1992 valuation. He said that Peacock Street is a full width bitumen carriageway only. This allotment is slightly below street level at its frontage and has a medium fall to the south. It is mainly a post-war Housing Commission area with mainly timber Housing Commission homes and a few brick homes in close proximity. The sale property has restricted views to the south-west and the Amberley Air Force Base is close by with its associated noise. The land is located approximately 3.6 kilometres south-west of the Ipswich Post Office and it has similar services to the subject land. Although the sale property was above the 1974 flood level which rose to its south-east corner, Mr Lochel considers it inferior to the subject land t;>ecause -- 4 of 8 -- 5 of its smaller area, greater distance from the CBD and because of its noise disadvantage from the Air Force Base. Mr Callinan knows these two properties and does not agree with Mr Lochel's description. He said that Sale No. 1 in Bremer Street is in a quiet area, has parkland across the road to the right and left of the property and some brick houses in close proximity. Although it is further from the Central Business District than the subject land, when stop signs and traffic lights are taken into account, it would be quicker to drive from the sale to the Centra( Business District than it would from the subject land. Mr Callinan therefore feels that Mr Lochel's statement that the sale is inferior to the subject land is unwarranted, as it fails to take into account the quietness of the area and its real proximity to the Central Business District. In respect of Sale No. 2 in Peacock Street, Leichhardt, Mr Callinan disagrees with Mr Lochel's statement that the surrounding development comprises mainly timber Housing Commission homes with a few brick homes in close proximity. He said that there is a greater proportion of brick homes than this statement would indicate, with others being built in the street. He saw it as being in the midst of new homes in a growing area. It is also no longer a Housing Commission area, as many of the houses are now rented to RAAF personnel. Mr Callinan also disagrees with the statement that Sale No. 2 suffers noise disadvantage by being closer to the Air Force Base. He said that the subject land is situated in the direct take-off flight path from the Base and that being almost a kilometre further away does not lessen the noise of overhead aircraft. Therefore, he considered that the property in Peacock Street is worth far more than the subject land. Mr Callinan also argued that Mr Lochel had made a mistake in valuing the land as "Residential" when it was zoned "Future Urban". However, Mr Lochel has valued -- 5 of 8 -- 6 the land under the provisions of section 11 (9) of the Valuation of Land Act 1944 and has excluded any potential for industrial purposes in his valuation. The sales referred to by Mr Callinan are zoned "Future Urban" and therefore are not appropriate to use as a basis of the valuation of land as residential. Although Mr Callinan considers that the two residential sales used by Mr Lechel are superior to the subject land, both of them are much smaller and one was completely flooded in 1974, while the other one was threatened by flooding. The evidence indicates that they are situated in quieter areas than the subject land, but both are somewhat further away from the Central Business District. Mr Lechel was aware of the differences between the sales and subject property and said that he has made allowances for these differences. He had the advantage of valuing the whole of the area and therefore, as a registered and experienced valuer, he is in a better position to be able to express such differences in monetary terms. Mr Callinan also referred to the decision in the case of IW and KJ Hall v. Chief Executive, Department of Lands, on 30th September, 1993, where the Land Court dismissed the appeal and determined the unimproved value of that land at $27,000. This land is situated in Warrell Street and contains an area of 2,820 sq. metres. However, it was badly flooded in 1974 and Mr Callinan concedes that it was worse flooded than the subject land. It was also valued under the provisions of section 11 (9) of the Valuation of Land Act 1944. I cannot place any weight on the evidence of Mr Beasley's valuation in 1991 and Mr Callinan's calculations of the unimproved value therefrom. Mr Beasley was not called to give evidence and I have no means of determining how soundly his valuation was based. Mr Callinan's subsequent calculations depend not only on the \_ -- 6 of 8 -- 7 accuracy of the valuation, but on his own assessment of the value of the house. In any case, sales of unimproved land are the best evidence of unimproved value. In Clough v. The Valuer-General (1981-82) 8 QLCR 70, the Land Appeal Court said at p. 76: " It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable 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." Although in this case, Mr Lochel's sales are somewhat different to the subject land, they are to be preferred to an analysis of an updated valuation of a valuer who was not called to give evidence. Mr Callinan has raised a valid point concerning to the environment of the subject land and the noise to which it is subjected and the additional noise which will follow the development of the recycling plant and the recent general industry approval. However, Mr Lochel was aware of the problems and said that he had taken them into account. If and when the proposed developments affect the noise level and environment of the subject land, they would be taken into account in future valuations. On consideration of the whole of the evidence, I have reached the conclusion that the appellants have not discharged the burden of proving that their valuation is excessive. Accordingly, the appeal is dismissed and the valuation of the Chief Executive is affirmed at $27,500. JJ TRICKETT MEMBER OF THE LAND bouRT -- 7 of 8 -- -- 8 of 8 --