Alscan Pty Ltd v The Valuer-General [1991] QLC 50

LAND COURT, BRISBANE. 18th December, 1991. Re: An appeal against a determination of the Valuer-General, Shire of Mulgrave. (AV91-1054). Alscan Pty Ltd v. The Valuer-General (Hearing at Cairns) D E C I S I O N Land described as Lot 1 on R.P. 733766 Parish of Smithfield, containing an area of 1771 square metres is situated at 39-43 Vasey Esplanade, Trinity Beach. It is zoned "Tourist Facilities" and is developed with a holiday unit complex and restaurant. As at 31st March, 1990, the Valuer-General assessed the unimproved value of the land in the amount of $570,000. Land adjoining to the south, being two surveyed lots totalling 2023 square metres in area, accommodating a single dwelling house, was valued at the same date in the amount of $325,000. Alscan Pty Ltd has appealed against the Valuer-General's decision in disallowing an objection against the first-mentioned valuation. The grounds of the appeal are that the land next door is larger, is not constrained by an easement as is the subject land, and is better suited for development, yet its valuation is $245,000 less. On a direct comparison the valuation of the subject land is estimated by the appellant to have an unimproved value of $284,515.55. Mr A. Scanlan appeared for the appellant company. He tendered a statement which enlarged on the superiority of the adjoining land. It was his understanding that unimproved value was intended to represent current market value based on property sales in the vicinity. He sees it as iniquitous that lands with equal potential in their unimproved state should carry [1991] QLC 50 -- 1 of 3 -- 2 such significantly different valuations. Mr Scanlan is of the opinion that if the legislation demands such alleged inequity then it is wrong for public statements to be made, as he says has occurred locally, suggesting that unimproved value is based on current market value. He concludes by stating "If the valuer has made a valuation based on any other consideration other than market value, it reflects on the basis of Government valuations throughout Queensland." The Valuer-General's valuation was carried out by Mr R.M. Bein, registered valuer employed by the Department of Lands. He advised that since the appeal had been lodged, a title search had revealed that there was in fact a registered easement over the subject property. Accordingly, the valuation required amendment by reducing the value applied to the area of 253 square metres which is encumbered by the easement. The valuation put before the Court then became as follows: 1518 square metres @ $320/square metre = $485,760 253 square metres @ $160/square metre = 40,480 $526,240 Adopt $530,000. In answering the further grounds of appeal, Mr Bein's report contained schedules showing firstly the comparison between the adjoining land referred to by Mr Scanlan and then the valuations applied to four other nearby and adjoining properties with frontage to Vasey Esplanade. He said that the subject property had been valued based on unimproved market value while the adjoining property with the lower value was developed with a single unit dwelling house and was required to be valued in conformity with Section 11(1)(vii) of the Valuation of Land Act of 1944 (as amended) which reads as follows: " In making, pursuant to this subsection, the valuation of the unimproved value of land exclusively used for purposes of a single dwelling-house or for purposes of the business of primary production, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in any case of potential use as aforesaid, that potential use is lawful when the valuation is made. " -- 2 of 3 -- 3 If the land was exclusively used for the purpose of a single dwelling house, as defined, as Mr Bein believed it was at the relevant date, then he was correct in finding its unimproved value notionally restricted to that use, and disregarding any lawful potential use. This section of the Act was clearly designed to provide protection against the potential rating burden which could flow from, in a case such as this, a single unit residential property being caught up in higher use potentialities. Mr Scanlan may not be alone in his criticism of the method of providing such protection through the Valuation of Land Act, but nevertheless that is the manner in which that protection is provided by the laws of this State. The legislation quite obviously creates an artificial and hypothetical valuation exercise for each qualifying property, yet the basis remains tied to an interpretation of market value had those lands been blighted by such use restrictions. Mr Scanlan had some criticism of Mr Bein describing the zoning of the subject land (Tourist Facilities) as being superior to "Residential C" which allowed multiple unit dwellings. Mr Bein explained that where appropriate, the Tourist Facilities zoning technically permitted wider uses, although he agreed that the two zonings in this particular locality attracted equivalent values. This was demonstrated in the schedule to which reference has been made. In the end result the primary ground of this appeal which sought relativity with the adjoining land, fails, as under the Valuation of Land Act the land has been correctly valued. Amendment to the valuation of the subject property has however, been found necessary due to the presence of the previously unrecorded easement encumbrance. The appeal is therefore allowed, the Valuer-General's valuation set aside and the unimproved value of the subject land as at 31st March, 1990, determined in the sum of $530,000. (R.E. Wenck) Member of the Land Court. -- 3 of 3 --