Bakhash (Snr) v The Valuer-General [1992] QLC 303

. ..'"Jl'! CO · ....., LAND COURT, BRISBANE. 6th November, 1992. Re: Appeals against determinations of the Valuer-General - Shire of Cloncurry - AV91-340 and 341. Robert Michael Bakhash (Snr) V. The Valuer-General (Hearing at Cloncurry) DECISION These appeals relate to the Valuer-General's valuations as at 31st March, 1990 of two lots within the business area - zoned "Central Commercial" - of Cloncurry. Details of the individual lots are as follows: AV91-340 - Lot 161 on Registered Plan No. 703304, parish of Cloncurry, containing an area of 1012 m 2 , situated Cnr of Ramsay and King Streets - Valuer-General's valuation $4,800. AV91-341 - Lot 5 on Registered Plan No. 707012 and Lot 1 on Registered No. 716605 parish of Cloncurry, containing an area of 888 m 2 , situated in Ramsay Street - Valuer- General's valuation $6,500. Mr Bakhash attended the hearing and gave evidence in support of the appeals. His estimates of value for the land are $2,000 in AV91-340 and $4,000 in AV91-341. The first lot (AV91-340) at the corner of Ramsay and King Streets is vacant except for advertising signs for which a small rental is paid. Mr Bakhash says that with the state of the economy, the site has no potential for any [1992] QLC 303 -- 1 of 6 -- - Page 2 - commercial development which would be viable. He states that the Council rates on the land for the 1990/91 financial year amounted to $1,079.40 as a result of the high rating structure, and the valuation does not take into account the financial burden imposed on owners of vacant commercial land. The second site {AV91-341) is developed with shops and a residence. Mr Bakhash says that the tenants were feeling the effects of the depressed economy, the loss and potential loss of employment in Cloncurry and at the relevant date could not have afforded rental increases. If he or other landlords increased rentals to cover increased outgoings caused by the valuations, then .the shops would become vacant. He referred to the existing vacancy rate for shop premises in Cloncurry. Mr W B Bowen, registered valuer, who is employed by the Department of Lands and who had been stationed in Cloncurry for about 5 years, had taken over the responsibility of defending the Valuer-General's valuations. He had not actually carried out the valuations but in the absence of that officer had examined the records, carried out the necessary research and had satisfied himself that the valuations were correct. As was the situation described in AV91-336 (Silvameer Pty Ltd), which had been heard immediately prior to these matters, there had been no sales of vacant commercial land in Cloncurry in the year prior to the relevant date (31.3.90). The sales evidence in the Town indicated an increase of 20% in that period for residential land and also for industrial land. The full details of the sales information which was adopted by the Valuer-General in establishing the position with regard to residential and industrial land was provided to the appellant. While Mr Bowen -- 2 of 6 -- - Page 3 - accepts that evidence of trends in value in other categories of real estate cannot be relied upon as necessarily providing a valuation basis, in the absence of evidence to the contrary, he considered it fair and reasonable to maintain the relativity which previously existed. Consequently all commercial land had been increased in value at the relevant date by the 20% adopted for residential and industrial lands. The actual assessments on the subject lands were as follows: "AV91-340 20 metres of frontage ·@ $235 per metre + corner influence 2.5% Adopt $4,800" AV91-341 "17.65 metres@ $370 per metre = Adopt $6,500" = $4,700 177 $4,817 $6,530 Mr Bakhash was very critical of the use of residential and industrial sales as being a guide to the trend in commercial land values. He argued that there was a number of commercial properties on the market and unable to be sold. He said that the subject properties have been on the market and could not be sold even at the (his) value of the improvements. He referred to a shop property at 34 Ramsay Street which had sold for $35,000 - a "give away" price. He agreed that the sale of the 34 Ramsay Street property was a forced sale due to the financial position of the vendor, but in his opinion, the fact that property had been first auctioned and there were no buyers at a realistic price, was an indication of the state of the market. Mr Bowen had investigated the sale of this property and agreed the sale price was well -- 3 of 6 -- - Page 4 - below a reasonable market value. In his opinion the circumstances of the sale were such that the evidence did not reflect an open market transaction. Mr Bowen had also investigated Mr Bakhash's ground of appeal that the subject properties were "up for sale and cannot sell." His enquiries indicated that there had been nothing such as advertising signs, to indicate that the properties were available for purchase. It was his understanding that they were listed for sale with one agent - not as individual properties - but for sale as one lot Mr Bakhash indicated that there had been "for sale" signs on the property, but it was unclear from his evidence what the asking price was for the vacant land as an individual parcel. He said he would consider any offers. When he was asked whether he would accept the Valuer-General's valuation he was somewhat evasive in his reply suggesting that any price he accepted would need to take into consideration his costs in holding the land. His evidence indicated a perception that the price land might fetch on sale and the valuation applied for rating purposes, should not necessarily be one and the same. He had not been aware that vacant commercial land had been sold at prices in excess of the Valuer- General's valuation, subsequent to the relevant date, as had been suggested by Mr Daniels in his capacity as a real estate agent, in the previous appeal to which earlier reference was made. Mr Bakhash also introduced some evidence relative to a newspaper report as to the perceived inadequacy of an offer of compensation for land owned by the Council and resumed for roadworks, in comparison with the Valuer-General's valuation of that land. Mr Bowen was able to provide the Court with the actual position, which was somewhat different to that reported. In any event, it is of no -- 4 of 6 -- - Page 5 - relevance to these appeals. Mr Bakhash's concern as to the rating burden imposed through ownership of the these commercial zoned lands is clear and understandable. Except for the effect that the rating structure might be shown to have on market value, it is not, the task of the Court to enquire into the imposition of local authority rates. The sales of the vacant commercial land, a considerable period subsequent to the relevant date, are not relevant evidence in this matter, although if indeed the land sold at prices in excess of the Valuer-General's valuation as has been suggested, then any deleterious effect caused by the rating structure has not expressed itself, at least in terms of the quantum of the Valuer- General's valuation, as at a date later in time. Mr Bakhash's criticism of the use of sales of residential land, in particular, to establish trends in the value of commercial land is well founded. The weakness in the approach is recognised by the Valuer-General, but then he has the task not only to establish the level of value in all categories of real estate in the town, but also to maintain what was seen to be reasonable relativity of values. Based on professional opinion, and in the absence of reliable sales to suggest that another approach should be taken, the decision was made not to disturb the relativity of values which already existed. This logically would have been based on evidence which had previously been relevant. The low sale of the improved property at 34 Ramsay Street tends to support Mr Bakhash's argument that there was need for care to be taken in interpretation of the state of the market for commercial land in Cloncurry. The circumstances of the sale had been investigated by Mr Bowen however, and he is not convinced that, quite apart from it being a sale of improved property, its analysis provides sound evidence of the correct value of vacant land. -- 5 of 6 -- - Page 6 - The difficulty facing the appellant here is that, in terms of the relevant legislation, the Valuer-General's valuation is deemed to be correct until proved otherwise, and the burden of proof rests with the appellant in proving the grounds of appeal. Mr Bakhash has shown that the valuation and the use to which it is placed in the assessment of Council rates is causing problems to himself as an owner and investor, but he has not shown to the Court's satisfaction that the valuation is necessarily wrong. The appeals are therefore dismissed and the Valuer-Gemeral's valuations affirmed. (A. E. Wenck) Member of the Land Court. -- 6 of 6 --