Baldwin & Ors v The Valuer-General [1991] QLC 194

I ) Re: Determination of Unimproved Values - City of Townsville - AV91-433, AV91-445 and AV91-460 D.S. and A.S. Baldwin and S Achterberg and R.M. Matson v. The Valuer-General DECISION ~~,.-...........-,.~---....t:..:......-~·-------- LAND COURT, BRISBANE. 11th December, 1991 The above appeals have been selected to be heard in the first instance as being part of a large number of appeals filed by landholders in the suburb of Yarrawonga in Townsville City. Details are:- A V91-433 Lot 26 on Plan T 118561 Parish of Coonambelah- 1575 m 2 - Valuer-General's valuation $132,000 - Appellants - valuation $85,000 - Situation 40 Yarrawonga Drive, Castle Hill - Owners OS and AS Baldwin A V91-445 Lot 8 on Plan T 118561 Parish of Coonambelah - 740 m 2 - Valuer-General's valuation $114,000 - Appellant's valuation $74,000 - Situation 8 Cottesmore Crescent, Castle Hill - Owner S Achterberg AV91-460 Lot 40 on Plan T 118475 Parish of Coonambelah - 620~ m 2 - Valu~r-General's valuation $155,000 - Appellant's valuation $:100,000 - Situation 75 Gilbert Crescent, Castle Hill - Owner R.M. Matson [1991] QLC 194 -- 1 of 7 -- - Page 2 - Each of the sites is zoned "residential A" under the provisions of the City of Townsville Town Planning Scheme. The relevant date for each valuation is 31st March, 1990. Called in evidence was practicing registered valuer Alan James Matson. Mr Matson values Lot 26 on Plan T 118561 at $88,000, Lot 8 on Plan T 118561 at $76,000 and Lot 40 on Plan T 118475 at $104,000. He says Lot 26 in its natural state comprised a moderately sloping rocky forest ridge which has been cut and filled and retained to provide an adequate building platform. Lot 8 is described by him as an irregularly shaped parcel with a long frontage to Cottesmore Crescent and comprised a moderately sloping forest ridge which has been cut and filled and retained to provide a building site. Mr Matson says Lot 40 is an irregularly shaped, above road level site with a moderate slope. It too has been cut, filled and retained to provide a building platform. Mr Matson says Lot 40 has good views over Cleveland Bay and parts of North Ward. Mr Matson informed the Court that when he first received instructions to carry out these valuations he searched for unimproved sales in Yarrawonga which, at first glance, tenet to support the level of unimproved value applied by the Valuer-General. However on closer examination Mr Matson says that the level of sales evidence at Yarrawonga, which is a high standard residential subdivision on Castle Hill with the attribute that most blocks are elevated c;1nd with sea views, was not supported by sales evidence in another high classed residential suburb known as Murray (Annadale). Mr Matson investigated commercial valuations at Murray made by the valuation firm Collins & Eales. These valuations, together with the Valuer-General's valuations and in some instances the sale details of these -- 2 of 7 -- - Page 3 - properties (including structures) are included within his tendered valuation report. It is clear from this material that the commercial valuations support or are above the level of unimproved value applied by the Valuer-General to lands in the suburb of Murray. It is also clear that the respondent Valuer-General increased the unimproved value for the 31st March, 1990 in the suburb of Murray by a factor of around 25% whereas the subject valuations were increased by a factor of 50%. Mr Matson further researched commercial valuations of properties in other suburbs of Townsville and came to the conclusion that the Valuer-General has been consistent in his application of sales evidence throughout most of the Local Authority areas. However when Mr_Matson looked at a similar comparison in Yarrawonga then he says the relativity differed. In every case with commercial valuations carried out at Yarrawonga by Herron, Todd, White, the Valuer-General's valuation is higher than the commercial valuation of the land which, Mr Matson suggests, includes allowances for the value of retaining walls and site works sufficient to provide a building bench. This schedule is also in evidence. Based on his comparison with the unimprnved values in Murray, Mr Matson is of the opinion tl)at the Valuer~General's valuations in Yarrawonga are too high and should be reduced by something in the order of 30% - 40%. This reduction would bring the valuations back to the levels existing prior to the 31st March, 1990 annual valuation, and in reality this is the b~sis for Mr_ Matson's valuations of the subject sites. Mr Matson told us that the property market in Townsville peaked in the first quarter of 1-989. _By relevant date the pilots strike had occurred, interest rates were very high, corporate crashes had occurred, and Mr Matson suggests -- 3 of 7 -- - Page 4 - the property market had fallen. He included in his valuation report some graphs which do show a fall in the volume of vacant land sales but unfortunately they do not reveal sale value levels. Mr Matson stresses that empirical evidence suggests that it was unreasonable to increase values by 50% at Yarrawonga as at 31st March, 1990 particularly as the increase seriously affects the established relativity with land values in other parts of the city. Mr Matson believes there has been a serious element in speculation in the market for land at Yarrawonga. Of the large number of vacant land sales, only 9 sites have been built on whereas at Murray up to 80% of the vacant land sale sites have had buildings erected upon them. During the presentation of his evidence Mr Matson commented in detail about the circumstances of most of the vacant land sales in Yarrawonga but I do not feel the need to incorporate this evidence in this decision. Evidence in support of the Valuer-General's valuation was provided by Departmental registered valuer Stephen Lyle Lagerroth. Mr Lagerroth does not disagree with Mr Matson in so far as his description of the subject lands are concerned but he, says that Lot 26 enjoys views of Cleveland Bay and Magnetic Island, and that Lot 8 enjoys views of the southern end of Magnetic Island, The Port, and Castle Hill, and that Lot 40 has extensive· views from Garbutt in the west to Cleveland Terrace in the east. I might say here Jhat Mr Matson's omission to describe the views from Lot 26 and Lot 8 in his valuation report must have been an oversight. Wher_e the valuers clearly part company in these cases -- is in respect of - the basis of valuation. For each of his valuations Mr Lagerroth relies upon three -- 4 of 7 -- - Page 5 - sales of vacant sites at Yarrawonga. In addition he tendered a schedule of nine sales of "Residential A" zoned sites together with his applied unimproved values to the sale sites. This material is in the hands of the parties for reference. As Mr Matson said, this vacant sales evidence prima facie supports the level of unimproved value placed upon the sale sites and on the appeal parcels. Mr Lagerroth also provided the Court with the results of his investigations into the circumstances surrounding most of his scheduled sales. He is at odds with Mr Matson in that he says that the market for land at Yarrawonga is still increasing. Mr Lagerroth considers the suburb of Murray to be a different type of suburb to Yarrawonga with different types of land purchasers. The views are generally not equal to those available from the subject sites except for a small number of sites with river frontage and it is interesting to note that the unimproved value of those sites for the 31st March, 1990 valuation were also increased by a factor of 50%. Now in essence the case for the appellants is that the relativity in the unimproved value at Yarrawonga has been disturbed in relati~n to that applied in other residential areas of Townsville. The Court is urged to restore the previously existing relativity, but I note that to reduce the subject valuations by 30% - 40% as did Mr Matson would result in no increase in la,:id values at Yarrawonga in comparison with the 25% increase in values in other parts of Townsville. However, Mr Matson did say in evidence that he feels that the 31st March, 1989 level of value at Yarrawonga was also too high but of course it musf be assumed ·that it was correct as there are no outstanding objections or appeals against the 31st March, -- 5 of 7 -- ---- -· ----- . - Page 6 - 1989 valuations in the area (vide Section 13 (7) of the Valuation of Land Act). It should be said, in fairness to Mr Matson, that he regards relativity as being an important factor in the process of valuation and with this submission I agree. However, could it have been that the valuations at Yarrawonga were lacking in relativity with those, of other lands in the 31st March, 1989 valuations? We simply have no evidence as to basis of the 31st March, 1989 valuations. The valuation of Land Act makes is clear as to what has to be determined. It is the market value of the land - vide Section 12 (1) of the Valuation of Land Act. Now the only evidence as to the market value of the land at Yarrawonga is the sales evidence at Yarrawonga and this is certainly to be preferred to the evidence of the commercial valuations of improved properties scheduled in evidence by Mr Matson. In the instances where some of those properties were the subject of sales, then those transactions were of improved properties and of little weight in the valuation process when vacant sales evidence is available. This a widely accepted principal supported by the authority of the - Land Appeal Court in Clough v. the Valuer-General (1981/2) 8 QLCR 70 p76. Now I note that the sales evidence __ relied upon by the Valuer-General in these cases took place prior to but close to the relevant date, and as such should reflect the market for land at Yarrawonga at that time notwithstanding the suggestion by Mr Matson that the market was motivated by speculation. I am simply not prepared to cast aside the evidence of vacant land sa-les at Yarrawonga. To do so would mean determinations without a foundation. I adopt the valuations made by the Valuer-General. Each appeal is dismissed and the following determinations are made:- -- 6 of 7 -- - Page 7 - A VS 1-433 The unimproved value of Lot 26 on Plan T 118561 Parish of Coonambelah as determined by the Valuer-General in the sum of $132,000 is affirmed. A VS 1-445 The unimproved value of Lot 8 on Plan T 118561 Parish of Coonambelah as determined by the Valuer-General in the sum of $114,000 is affirmed. AV91-460 The unimproved value of Lot 40 on Plan T 118475 Parish of Coonambelah as determined by the Valuer-General in the sum of $155,000 is affirmed. (C.H. Carter) Member of the Land Court. -- 7 of 7 --