Fermoyle v Chief Executive, Department of Lands [1993] QLC 163

LAND COURT BRISBANE 10TH DECEMBER, 1993 . Re: Appeal against Annual Valuation Valuation of Land Act 1944 City of Hervey Bay (A V93-432) James Patrick Fermoyle v. Chief Executive , De p artment of Lands (Hearing at Maryborough) DECISION Mr J P Fermoyle is the owner of land described as Lot 1 on Registered Plan 44600, Parish of Urangan, containing an area of 7,649 square metres. Pursuant to the provisions of Section 168 of the Valuation of Land Act 1944, the Valuer-General valued this land as at 31st March, 1992 at $20,000. Mr Fermoyle objected against this valuation and by letter dated 28th June, 1993, he was advised that his objection had been disallowed and the valuation remained unaltered at $20,000. Mr Fermoyle then appealed to the Land Court against this decision on his objection, advising that his estimate of the unimproved value is $12,800. His grounds of appeal are that he considers an increase of $7,200 in the valuation to be excessive and that land in the area does not have any council services. Between the date of valuation and the date of hearing of this matter, the Lands Legislation Amendment Act 1992 had the effect of substituting the Chief Executive, Department of Lands, for the former statutory office of Valuer-General. Therefore, it is appropriate that the Chief Executive be the respondent in this matter in place of the former Valuer-General. [1993] QLC 163 -- 1 of 5 -- 2 The subject land is situated in Chapel Road, Nikenbah, adjoining the Pialba- Urangan railway line with access by means of the bitumen sealed Chapel Road. Services include above-ground power and telephone. The report tendered on behalf of the Chief Executive describes the land as a level to easy site with a slight south-westerly cross-slope. The land is zoned "Rural B" and developed with a low- set timber residence. Mr J P Fermoyle gave evidence that the Town of Nikenbah is situated about seven or eight kilometres from Pialba, off the Maryborough-Hervey Bay Road. He describes it as a little farming community with pineapples and sugar being the main crops. The town of Nikenbah consists of two stores, one with a petrol depot. It is on the Maryborough-Hervey Bay railway line with a train service about once a week, or to pick up fruit as needed. There was a school but it closed in 1964. Mr Fermoyle describes the land as rising moderately to the rear. He said that there is a cutting on the road boundary necessitating a circuitous route from the house. The railway line runs along the boundary of the subject land and because it is built up, water runs off the railway embankment through the south- west corner of the property. He said that in his view the valuation had increased excessively for the type of allotment which had no Council services. He said the property has no views, the only outlook being over surrounding lands. By way of comparison, Mr Fermoyle pointed to the neighbouring property of 2 hectares which had a valuation of some $35,000 to $37,000, and although it was twice the area of the subject land, its valuation was not proportionately greater. He described it as far superior, a nice level block. -- 2 of 5 -- 3 Mr Fermoyle did not know the individual sales used by the Department to arrive at his unimproved value. However, he knew the general area and said that it was subdivided some 20 years ago. He said that speculators were continually buying and selling blocks in that area and that the prices had crept up. He agreed that the sale properties did not get any better services than the subject land and were situated further from the shops at Nikenbah. However, he said the allotments could not be compared with the subject land as they were larger, more level and had better shape than the triangular subject land. He also agreed that the proximity to the railway line was no great disadvantage as the train now comes only when there is something to pick up at Nikenbah. His estimate of the unimproved value at $12,800 is the 1990 level of valuation and he says there should be no increase. Mr D R Gaedtke, registered valuer employed by the Department of Lands, gave evidence on behalf of the Chief Executive. Mr Gaedtke tendered a report and valuation which showed that his valuation of $20,000 was based on two sales in the vicinity of the subject land. Sale No. 1 is situated in Keen Road just off the Maryborough-Hervey Bay Road and contains an area of 1.2 hectares, zoned "Rural B", which sold in October 1991 for $34,000. This property was unimproved and Mr Gaedtke applied $34,000 in the 1992 valuation. He describes the land as a level to easy site which was uncleared at ~he time of sale. He says that it has similar services to the subject land but is larger and better located and overall he considers it superior. Sale No. 2 is situated on the Maryborough-Hervey Bay Road and comprises an area of 5,423 sq. metres, zoned "Rural B" which sold in July 1991 for $18,000. -- 3 of 5 -- 4 This sale analysed to show an unimproved value of $16,500 and a valuation of $15,000 was applied in the 1992 valuation. Mr Gaedtke describes this land as a level site situated on the Maryborough-Hervey Bay Road, with similar services but smaller in area and better located than the subject land. Overall he considers it to be inferior. Mr Gaedtke had valued the 2.66 hectare property immediately to the east of the subject land at $32,500 as a rural homesite. This represents an increase of 30 per cent over the 1990 valuation of $25,000. Immediately to the east is another property of 3.643 hectares which Mr Gaedtke valued at $37,500 as a rural homesite, which also represents an increase of 30 per cent over the 1990 valuation of $29,000. Mr Gaedtke said that the two sales were on the northern edge of a large subdivision of mainly 5 to 10 acre (2 to 4 hectare) homesites. However, the properties on the northern edge are mainly 3 acre (1.2 hectare) sites. He said in this area there are small pockets of rural homesites surrounded by land used for primary production purposes, mainly canegrowing. He said there is a considerable demand for these rural homesites, particularly as the Hervey Bay area is growing. While there are houses built in the immediate area of the sales, there is still quite a lot of vacant land. Mr Gaedtke said that he chose the two sales as they are closest to the subject land. However, there were other sales in the area and these sales indicate that 3 acre sites attract a premium. Although the subject land is triangular in shape, Mr Gaedtke considers there is plenty of room for a building site. He said that sale No. 2 fronted a very busy main road which could be dangerous for entry -- 4 of 5 -- 5 and exit, a disability from which the subject land did not suffer. The lack of services spoken about by Mr Fermoyle is common to the area and reflected in the sales. Mr Fermoyle raised the point that the property to his east was more than twice the area and yet valued at only $37,500. He contended it should be $50,000 as it is a lovely level block. Mr Gaedtke responded that the additional area does not add a proportional value and he had evidence to that effect from the sales in the area. I can understand why Mr Fermoyle appealed against his valuation as his property increased in value by 60 per cent whereas those of his neighbours had increased by only 30 per cent. However, he was not able to assist me with details of any sales in the area. On the other hand, Mr Gaedtke has demonstrated that there is a demand for small rural homesites in the area. He said that the sites up to 3 acres are selling at a premium and that the demand for similar blocks is increasing. While it is important that the valuing authority value properties in relation to one another and maintain that relativity of values as far as possible, it is inevitable that over the years the relativity of various sized properties with different features will become more diverse. In this case, Mr Gaedtke has demonstrated that there is a demand for the smaller rural homesites and that they have increased in value at a greater rate than the larger ones. In the circumstances, I have no evidence before me to indicate that his reasoning is incorrect. Therefore, it is inevitable that Mr Fermoyle's appeal must fail. Accordingly, the appeal is dismissed and the valuation of the Chief Executive is affirmed at $20,000. J J TRICKETT MEMBER OF THE LAND COURT -- 5 of 5 --