Duncan & Anor v Director-General, Department of Lands [1993] QLC 104

LAND COURT, BRISBANE. 27th August, 1993 . Re: Appeal against Annual Valuation, Valuation of Land Act 1944 Shire of Beaudesert, (AV93-36) Christopher Garry DUNCAN & James Albert BUNCE V. Director-General, De partment of Lands (Hearing at Beaudesert) DECISION Mr C G Duncan and Mr J A Bunce are the owners of land described as Lot 40 on Registered Plan 123662, Parish of Moffatt, County of Ward, containing an area of 2.042 hectares. In accordance with the provisions of section 168(1) of thE3 Valuation of Land Act 1944, the Valuer-General assessed the unimproved value of the subject land as at 31st March, 1992 at $50,000. The owners objected to this valuation and by letter dated 25th January, 1993 they were advised that their objection had been disallowed and that the valuation remained at $50,000. The owners then lodged an appeal to the Land Court against the Valuer- General's decision on their objection advising that their estimate of the unimproved value is $38,500. The grounds of appeal are as follows: "1. An adjoining parcel, Lot 41 on RP 123661, is only now valued by the Valuer-General at $34,000 and he has increased that to $40,000 (only), from 30/6/93. Lot 41 is a corner block and slightly larger than Lot 40. It has no man-made dam. On the above bases alone, Lot 40 should be valued at less than Lot 41. [1993] QLC 104 -- 1 of 8 -- 2 2. The land is used for rural residential dwelling, with no town water, sewerage or street lighting or adequate road. It has special disabilities more particularly described in our objection to the last annual review, which we expressly incorporate herein, such as exposure to flooding and being adjacent to a railway line and reserve land. These aspects have not been properly taken into account, as evidenced by virtually identical increases to surrounding lots, and the new assessment for Lot 40 at 25% more than that for the adjoining Lot 41. 3. The proposed increase for Lot 40 is 19.04%. This would constitute an increase of 40.84% since 31 /3/89 i.e. in the 3 years from 31 /3 /89, to 31 /3 /92, the date of the actual new assessment. That would also constitute an increase of 108.33% since prior to 31 /3/89 when the land was valued at $24,000. We are not aware of any relevant sales evidence to justify these figures, especially during a sustained period of severe recession and with inflation lower than 2% in the relevant period of assessment as at 31 /3/92. 4. We are aware of vacant blocks in the nearby more prestigious Edens Landing estate advertised at $55,000 for 9 1/2 acres and $47,000 for 9 acres. Lot 40 is 5 acres 7 perches. 5. The Valuer-General has wrongly taken into account recent new subdivisions in the area with smaller lots but which have town water, street lighting, underground power and adequate roads. 6. The Valuer-General has applied improper and wrongful prinCiples and/or procedures in his assessment by simple across the board and virtually identical increases to lots in the area, without individual regard for Lot 40 and its own features." Between the issue of the Valuer-General's decision on objection and the hearing of this matter, the Lands Legislation Amendment Act 1992 substituted the statutory office of chief executive of the Department for the statutory office of Valuer-General. Section 11 (4) of the Public Service Management and Employment Act 1988 and schedule 1 fo that Act provides that the chief executive is the Director-General, Department of Lands. For present purposes, therefore, it is -- 2 of 8 -- 3 appropriate that the Director-General be the respondent in these proceedings in place of the former Valuer-General. Mr Christopher Duncan , one of the joint owners, appeared and gave evidence on behalf of the appellants. Mr W Crothers, registered valuer employed by the Department of Lands, gave evidence on behalf of the Director-General. Mr Crothers' report states that the land is situated about 9.5 kilometres north north-east of Beenleigh, with access via the Dairy Creek Road and the Waterford- Tamborine Road, which are main roads. He describes the land as being selectively cleared, reasonably level coastal forest country, gently falling to the rear and prone to inundation from local runoff. The land is zoned "Rural Residential A" under the Shire of Beaudesert Town Planning Scheme. It is used for rural residential purposes and is developed with a dwelling house. Mr Crothers values the land at $50,000. Mr Duncan gave evidence that in his opinion the subject land is wrongly valued compared with Lot 41 , located immediately to the north, which has been valued at $40,000. Lot 41 is situated on the corner of Dairy Creek Road and Wilson Road and has a registered easement traversing it from the north-east to the south-west corner. Mr Duncan said that this is a drainage easement which channels water from Wilson Road to the south-west corner of the Lot 41. However, water from this easement flows onto the subject land . Wh i le this is of advantage to the owners of the subject land to fill a dam located in that vicinity, in times of heavy -- 3 of 8 -- 4 inundation the lower parts of the subject land floods. It was extensively flooded in 1974. The western boundaries of both the subject land and Lot 41 are adjacent to the Beaudesert Branch Railway Line which, although it causes few problems, is built up above the natural level of the land. This contributes to the water flow problems described by Mr Duncan. Because of the propensity to flooding, the house on the subject land was constructed towards the Wilson Road frontage. In Mr Duncan's view, there is no justification for Lot 40 being valued at $50,000, while Lot 41 is valued at only $40,000. While he concedes •that the easement is a blot on the title, he sees it as of no other disadvantage to Lot 41, but at times the runoff of water does disadvantage the subject land. By way of further comparison, Mr Duncan stated that Lot 41 was slightly larger than the subject land and being situated on a corner should be more valuable. Mr Duncan gave evidence about the increases in the years since 1988 which he says have amounted to about 100% in only 4 years. He stated that his notice of appeal contains anecdotal evidence of sales in the more prestigious Edens Landing Estate, situated about 2 kilometres from the subject land. This estate has underground power, town water, good roads and he said that in newer estates the average price is higher, even for smaller blocks. -- 4 of 8 -- 5 Mr Duncan was critical of the way the Department assessed annual valuations by computer, with no physical inspection. He said that only after he had objected to the valuation was there any inspection and then, conveniently, the Department confirmed the earlier computer valuation. Mr Duncan said that in response to a request under the Judicial Review Act for a written statement of reasons, he received a letter from the Department wh ich stated the reasons for determining the value at $50,000 were first, sales of unspecified 8,000 square metre blocks in Buccan Road for $60,000, which were only slightly superior to and smaller in area than the subject land; second, relativity with Lot 39, which adjoins the subject land to the south, and which is valued at $53,000. The letter also indicated that the valuer was aware of the problems associated with Lot 40. Since there was no recognition given to the problems associated with the water runoff from the easement on Lot 41, Mr Duncan concluded that the Department had not taken this into account. He said that Lot 39 is much higher in elevation than Lot 40. Mr Duncan did not know the sales used by Mr Crothers as a basis for his valuation, however, he did know the general locality of the sales . He commented that two of the three sales, those in Buccan Road and Veronica Court, were in newer estates. Mr Crothers was not the valuer who applied the valuation of $50,000 to the subject land. That valuation was made by another valuer who had since left the -- 5 of 8 -- 6 Department. However, for the purposes of this appeal Mr Crothers made himself familiar with the subject land and the sales. He said that he had tried to use sales that were subject to inundation and located as close as possible to the subject land. The first of the sales is situated in Weaber Road and has an area of 2 hectares, zoned "Rural Residential A", which sold in August, 1991 for $58,450. It was analysed to show an unimproved value of $56,450, and $54,000 was applied to it in the 1992 valuation. This land is described as being an elevated homesite, falling to river blue gum flats. It is superior in outlook, location, nature of land and shape, has similar access, area and situation, and Mr Crothers considers that it is superior to the subject land. He stated that it is subject to inundation from the Logan River but is elevated at the road frontage. The second sale is situated in Buccan Road, has an area of 1.004 hectares and is zoned "Rural Residential B". It sold in August, 1991 for $39,900 and was analysed to show an unimproved value of $38,400 and $30,500 was applied to it in the 1992 valuation. This land is described as being level at the front and rising gently to the rear. Mr Crothers considered it to be inferior to the subject land, because it is not as well located, is smaller and the nature of the land is inferior. However, Mr Duncan pointed out that as it is zoned "Rural Residential B", it may have some element of subdivisional potential in the longer term. Also, he said it is in a newer estate, but Mr Crothers considers that in this regard it is not significantly different to the subject land. -- 6 of 8 -- 7 The third sale is situated in Veronica Court and has an area of 1.148 hectares, zoned "Rural Residential B", and sold in December, 1991 for $43,500. This sale analysed to show an unimproved value of $42,500 and $39,500 was applied to it in the 1992 valuation. It is described as being situated on the side of a hill, sloping from the road to flats and backing onto the Railway Reserve. It is considered to be inferior in location, nature of land, size and access. Overall Mr Crothers considers the sale to be inferior to the subject land in all respects. It is also zoned "Rural Residential B" and Mr Duncan suggested that it may have some long term subdivisional potential. However, Mr Crothers doubts there is any subdivisional potential in these sales, as their sale prices are reflective of rural homesite values and houses have been constructed on each of them. When questioned about the relativity with Lot 41 , Mr Crothers said that he thought it should have been valued somewhat higher, perhaps at $45,000. Mr Duncan objected to this as he said that the Valuation of Land Act provides that the Valuer-General's valuation shall be accepted as correct unless proved otherwise. The Department had valued the Lot 41 at $40,000 and it was inappropriate for Mr Crothers to suggest that it was wrongly valued while the subject land was correctly valued. He suggested that Mr Crothers was really trying to justify the valuation which had been done by computer. It is quite apparent that Mr Crothers realises that there is something wrong with the relationship the between values on Lot 40 and Lot 41 . However, he has -- 7 of 8 -- . . 8 not been able to demonstrate to my satisfaction that it is the subject land that is not wrongly valued. It does seem that allowance has been made for the easement which traverses Lot 41 and that no or little allowance has been made for the effects of water from that easement on Lot 40. I am satisfied that Mr Duncan has discharged the onus of showing that the valuation placed on Lot 40 is incorrect. However, from the sales available it is difficult to determine what should be the value placed on that property. It is clear that while Lot 41 does have the blot on the title from the drainage easement, the run off of water from that easement combined with the built up rail embankment, causes problems for the subject land. It also seems that Lot 39 to the south is a higher block than block 40 and does not suffer from the same inundation. In the circumstances I feel that a reduction is warranted. However, Mr Duncan has not been able to demonstrate that Lot 40 should have a lower value that Lot 41 or indeed should have the same value. I therefore consider that a valuation of $45,000 would be appropriate. Accordingly, the appeal is allowed and the valuation of the Director-General is set aside and the unimproved value is determined at $45,000. J J TRICKETT MEMBER OF THE LAND COURT -- 8 of 8 --