Alscan Pty Ltd v Chief Executive, Department of Lands [1994] QLAC 55

LAND APPEAL COURT TOWNSVILLE 17 OCTOBER 1994 Re: Appeal against a Decision of the Land Court. Determination of Unimproved Value - Shire of Mulgrave. Alscan Pty Ltd v. Chief Executive, Department of Lands J U D G M E N T The Valuer-General (as he then was) determined the unimproved value of land situated at 47 Vasey Esplanade, Trinity Beach, in the amount of $425,000 as at 31st March, 1991. The land contains an area of 1,771 sq. metres and is described as Lot 1 on Registered Plan No. 733766, Parish of Smithfield. An easement encumbers an area of 253 sq. metres. An appeal by Alscan Pty Ltd, as the owner of the land against that determination, was heard by the Land Court and dismissed. The matter came before this Court as an appeal from the decision of the Land Court on the following grounds: " The Court was misled by answers given under oath by officers of the Lands Department in regard to the sale of land at Yorkeys Knob which was the basis of the Valuer General's valuation. It was stated road, which separated two parcels of land, conferred no value on them, was to provide public access to the beach and had no parking on it. Mr White referred to this aspect in his determination. The reality is that the two parcels of land including the dedicated but unsealed road are a Caravan Park, commenced by the Shire on the unused road and two adjacent blocks of land, approximately twenty years ago. The three are shown on Shire maps as dedicated to a common purpose. The road does not at this moment, nor has in the last five years provided public access to the beach, it is fenced off and studded with caravan and camping sites, with concrete parking slabs and power outlets. The sale referred to was of the Caravan Park, (of which the road is a vital component), - not vacant land." [1994] QLAC 55 -- 1 of 6 -- 2 In deciding that the valuation appealed against was not made in error, the learned Member (as he then was and now President) of the Land Court accepted evidence given by the valuer responsible, Mr Bein, relative to a sale which had taken place of land located some distance away at Yorkeys Knob. From the Record of Proceedings in the Land Court, it is clear that Mr Bein placed importance on that Yorkeys Knob sale. At p.14 of the transcript Mr Bein said, "That was a property which was bought for redevelopment by a building company and that was the only sale with beach frontage, esplanade frontage that occurred which could have been considered for multi-unit purposes on any of the beaches being Clifton Beach, Palm Cove, Yorkeys Knob, Holloway Beach and Trinity Beach". When asked, "Is it true then that that sale was used not as a comparison but reflecting trends?", Mr Bein replied, "It was used to reflect the trends. If you say that was used to do a direct comparison on a Court matter, well that may be the case but it was the only sale there of beach-front redevelopment type land up to about October 1991." Details of the sale were provided in the report tendered to the Land Court through Mr Bein. Land described as Lots 10 and 11 on RP 705890, containing 2,024 sq. metres was sold on 23rd August, 1990 for $500,000. The sale was said to have been analysed to show an unimproved value of $460,000 and a valuation of $450,000 was applied to that land as at the date relevant in this matter. (It appears that the previous valuation on the land had been $500,000). In his cross-examination, Mr Bein had agreed that the sale land comprised "two unrelated sites separated by a piece of land" and said, "There is nothing on the piece of land that separates them. It is an unformed road." Mr Bein said that the information supplied to him by a person associated with the company which purchased the land, was that the Council would not entertain closure of the unformed road. "They" (the Council) "had agreed to his redevelopment proposal of two blocks of six units on both allotments with him redeveloping the - putting a garden-type beautification area in between the two properties ......" -- 2 of 6 -- 3 In the Notice of Appeal to the Land Court, the appellant company estimated the unimproved value of the subject land, at the relevant date, to be $271,384. Evidence was led in that hearing, through Mr A.H. Scanlan, a director of the appellant company, who contended for a valuation in the amount of $251,986. Mr Scanlan conducted the appellant company's case before us. As is clear from the grounds of the appeal, the thrust of the case was that the sale at Yorkeys Knob was of an operating caravan park, the development of which, including part of the office/residence and a number of caravan park sites with concrete slabs, encroached to fully utilise, for caravan park purposes, the unformed road. A letter dated 28th July, 1994, under the hand of Albert Menzel, said to be a director of Idbury Pty Ltd, the purchaser of the sale lands, and addressed to Mr Scanlan, gave some history as it related to the acquisition of the land. The letter advised that the property at the time of the sale by a mortgagee, was known as, and operated as "Safari Caravan Park". The name, from the date of possession, was changed to "Yorkeys Beachfront Caravan Park" and had continued to operate as such. Mr Menzel's letter indicated that urgency had surrounded the transaction and those involved in the purchasing company had not been aware "that there was a road reserve (Adair Street) running through the middle of the Park - this was found out early 1991". Mr Scanlan called Mr H.F. Oostergo, a Yorkeys Knob resident who knew much of the history of the caravan park development. We do not intend to say more about Mr Oostergo's evidence for it is accepted, without reservation, that at the date of the sale of the Yorkeys Knob land in August 1990, the property, including the unformed road, was developed as a caravan park and, subsequent to its acquisition, continued to be used for caravan park purposes. There seems no dispute that the owner prior to Idbury Pty Ltd had applied to the Council for approval to develop the freehold land for multi-unit residential purposes. The difference between the parties relates to the correct approach to the -- 3 of 6 -- 4 analysis of the sale of the land. Mr Scanlan is convinced that the highest and best use of the land was for continued use as developed as a caravan park. The improvements then would add significant value to the land, which is further enhanced by the use made of the road reserve. The respondent relied on the Record of Proceedings in the Land Court and adduced further evidence through Mr P.F. Goodman-Jones, senior valuer with the Department of Lands in Cairns. Mr Goodman-Jones had acted as advocate for the Department in the Land Court hearing. His evidence confirmed that of Mr Oostergo, that the caravan park utilised the surveyed road together with an additional area within an adjoining reserve. However, Mr Goodman-Jones also confirmed the evidence given to the Land Court, that it was the Department's understanding, through inquiry made by Mr Bein of a Mr Nunn, also a director of the purchasing company, that the intention of the purchaser at the time of purchase was to proceed with the approved multi-unit development. In Mr Goodman-Jones's opinion, with the market decline, it would not have been prudent for the purchasing company, which was a recognised local developer of multi-unit sites, to redevelop the freehold land until market conditions had improved. Continued operation of the caravan park offset holding costs in the meantime. Mr Goodman-Jones said that Mr Bein's notes of the conversation he had with Mr Nunn, confirmed that those associated with the purchasing company had not been aware that the caravan park improvements on the road were illegal. However Mr Goodman-Jones did not accept that experienced local developers would not have been aware that the land acquired comprised freehold land of 2,024 sq. metres. In his opinion the caravan park was not a viable operation because of its small total area. The freehold land had been valued by the Department on the basis that its highest and best use was as zoned, for multi-unit residential purposes. It is clear that the Department of Lands considered that, at the date of sale, the highest and best use of the freehold land was for redevelopment, and therefore the -- 4 of 6 -- 5 caravan park structures added little more than nominal value to the land. The sale had been analysed on that basis - the result indicating to the Department that there had been a decline of about 10 per cent in the value of that land since its previous valuation. It is the evidence of Mr Goodman-Jones that the sale at Yorkeys Knob was not used as a direct comparison in the valuation of the subject land, but as an indication of a declining trend in values in these beachfront localities. The Trinity Beach market had been perceived by the Department to have been even more "heated" in the 1990 period than had the market at Yorkeys Knob. As a result, the valuation of the subject land had, at the relevant date, been eventually reduced to a level 20 per cent below the previous valuation. It is unfortunate that the full details of the use of the sale property including that of the surveyed road, were not put in evidence by Mr Bein in the Land Court. Mr Scanlan has obviously gone to considerable trouble to present the correct physical situation in an attempt to rebut what he understood to be the relevance of the evidence given by Mr Bein. Nevertheless, the appellant has the onus of proving that the valuation appealed against is wrong. Section 33 of the Valuation of Land Act 1944 (reprinted as at 27th January, 1994) provides: " Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered." In dealing with appeals against valuations and the Notice of Appeal s.45(4) of the Act provides: " Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner." Mr Scanlan has succeeded in casting doubt on the weight which should be placed on the evidence provided by the sale of the Yorkeys Knob caravan park land, -- 5 of 6 -- 6 in so far as that evidence reflected the extent of the decline in values, as at 31st March, 1991, for beach or esplanade frontage multi-unit residential lands in the locality. He has not, however, proved that the unimproved value of the subject land, as determined, is wrong. In the Land Court Mr Scanlan relied on the evidence provided by his analysis of the sale of a residential property adjoining the subject land. The sale took place on 29th November, 1991. While the learned Member commented that this sale "appears as a sale which would not support the value applied to the subject land", he found that "the sale took place on a date which is far too remote in time from the relevant date to have any relevance in the exercise before the Court." It seems that there was no disagreement that the market had further declined in the period from the date of valuation to the date of that sale. In the circumstances we agree with the findings of the Member below. The appeal is dismissed and the decision of the Land Court is affirmed. (signed Cullinane J) JUSTICE OF THE SUPREME COURT (signed RE Wenck) MEMBER OF THE LAND COURT (signed JJ Trickett) MEMBER OF THE LAND COURT -- 6 of 6 --