Burnside Nominees Pty Ltd v The Valuer-General [1991] QLC 172

( i _____.,.,,,,~ LAND COURT, BRISBANE. 15th November, 1991. Re: An appeal against a determination of the Valuer-General, Shire of Calliope. AV91-260. Burnside Nominees Pty Ltd v. The Valuer-General (Hearing at Gladstone) DECISION The appellant company is the registered proprietor of a small river-front site at Boyne Island which the Valuer-General has valued, unimproved, as at 31st March, 1990, in the sum of $53,500. The Residential A zoned land is described as Lot 104 on Plan B8713, Parish of South Trees, having an area of 336 square metres. It is situated near the northern end of Island Esplanade, its rear or eastern boundary being adjacent to the foreshore of the Boyne River, which at this point comprises a sand beach providing a popular still-water swimming location. Island Esplanade is a one-way bitumen strip sealed road with concrete kerbing and channelling on the opposite site to the frontage of the site. All town services including sewerage are available. The Valuer-General describes the land as being a regular shaped parcel above street level on slightly undulating sand dunes, with views to sea. It is agreed between the parties that Calliope Shire Council Policy No.67 (Boyne River Flooding Policy), being a policy covering all properties affected by flooding on the Boyne River, includes the subject property. [1991] QLC 172 -- 1 of 8 -- 2 Mr D.C. Friend a director of the appellant company attended the hearing and gave evidence in support of the Notice of Appeal, in which the unimproved value is estimated as $14,000, the previously existing valuation. Mr Friend says that the valuation .appealed against disturbs the previously existing relativity between valuations in the immediate locality and particularly the western non-riverfront street frontage. The subject valuation represented an increase of 282% over the previous valuation while property on the western street frontage had been valued at a 90% increase. He tendered a letter from the Valuer-General dated 10th October, 1988, which said, inter alia, and in reference to the relativity of values which had existed at that time and through to the valuation now appealed against: My Delegate and the Valuer concerned reinspected the subject property and I am firmly of the opinion that the valuation is soundly based on sales and in correct relativity with surrounding properties. " Mr Friend's information was that the 1990 valuation had been based on a sale of a site in Blackwell Street adjacent to the Boyne River on the opposite side in Tannum Sands. It is his opinion that Tannum Sands is a more valuable location, and that there were circumstances surrounding the sale which made it unreliable. He says that the site was sold by a speculator and purchased by an owner of property across the street who wished to protect an existing view. On the basis that the sale did not reflect market value and, in any event, was a site difficult to compare with the subject, Mr Friend saw no basis for interfering with the existing Boyne Island relativities of value. He said that if previous relativity was strictly adhered to then the valuation of the subject would not have exceeded $26,000. -- 2 of 8 -- 3 The disabilities of the site were described by Mr Friend. Firstly it had been affected by flooding and tidal surge, so much so that in his opinion it was unsuitable for the erection of any residential structure of significant value. A letter from Calliope Shire Council dated 2nd March, 1976, was tendered to support this opinion. That letter contained, inter alia, the following comments regarding the subject land: (a) Council is aware that the land is prone to flooding and tidal surge, and could be subject to serious erosion. (b) Council considers it extremely unwise to erect a structure of value on such land. (c) Council does not in any way by this approval commit itself to any expenditure whatsoever on beach protection works in the future to protect buildings on the land. ( d) Council would oppose the construction of any protective works being constructed for the purpose of preventing erosion unless such works are carried out completely in accordance with the requirements of the Beach Protection Authority, following a detailed study, by that Authority. " At that time the existing low-set "shack" which was sited close to the river-front had been severely damaged by the tidal surge associated with the 1976 cyclone and the Council had given approval for its repair. Another letter dated 12th November, 1985, from Calliope Shire Council to the appellant company was tendered. The first paragraph of that letter reads as follows: " Studies carried out in recent years have shown that in extreme conditions some allotments at Boyne Island may be wholly or partly submerged by flood water in the event of a major flood in the Boyne River. The abovementioned allotment owned by you is one of the lots affected. Statistically the incidence of such flooding could occur once in each 100 years. However, that should not be a reason for complacency. That correspondence included a copy of the "Boyne River Flooding Policy - Existing Res "A" Lots" in which is set out the criteria which shall apply to the use of land in a Prescribed Area and identified by mapping. The statement sets out the building requirements for new dwellings on affected property - one of which is that -- 3 of 8 -- 4 every such structure "shall have sufficient floor area above the 1:100 year flood level to act as a refuge for its occupants in the event of flooding". Another is that any such structure "shall be constructed from such materials as are stable and retain their strength when immersed in water". Mr Friend had also tendered a letter from the Council dated 13th May, 1981, which indicated that if the land was to be protected from flooding of a frequency of 1 in 80 years, it would need to be filled to a height of 3.755 metres (State Datum). While Mr Friend maintains that the total site would be required to be filled to this level, it appears on the evidence before me that any prior requirements with regard to the filling of these flood affected sites would now need to be considered in terms of the more recent building requirements under Policy No.67. Mr Friend sees the presence of an adjoining public carpark as causing loss of privacy, noise, dust and nuisance generally and as having a deleterious effect on value. Other factors affecting value are the very small size and the reduced site coverage caused by building alignment set-backs. Evidence for the Valuer-General was given by Mr B.T. Coe, registered valuer employed by the Department of Lands, who had carried out the valuation appealed against. He agreed that reliance had been placed on one sale when the valuation had been written and that was of the Blackwell Street land, the details of which are: Lot 146 RP 615976, 613 square metres, 28th December, 1989, $80,000, in filled condition, analysed to show an unimproved value of $69,750 with an application of value of $65,000 as at 31st March, 1990. Mr Coe indicated that had the allotment been of sound physical unimproved condition then a valuation of $73,000 would have been applied in line with other Blackwell Street properties with Boyne River frontage. Mr Coe had interviewed both the purchaser and selling agent. The purchaser did live across the street as Mr Friend said and had intentions of disposing of his home which -- 4 of 8 -- ( 5 would have had its views of the river built-out. It was indicated to Mr Coe that the purchaser needed to meet the market for the features of the block and another buyer had been negotiating a purchase. The land was back on the market at a considerably higher price which was seen to be now unachievable. Mr Coe said that due to the large number of objections to the extent of increases in valuations of the river and waterfront properties, he had further researched the sales evidence and found that there was some need to analyse the sale of a beach frontage improved property at "The Oaks Avenue" Tannum Sands. Details of this sale are as follows: Lot 1 RP 607824, 506 square metres, 7th June, 1989, $102,500 analysed to show an unimproved value of $92,000 and to which property a valuation of $76,000 had been applied, but before reference to the sale. Mr Coe said that it was not normal practice to analyse improved sales of residential properties, but this property by the inferior nature of improvements was seen to be lightly improved and its analysis more than supported the valuation applied as well as the evidence of the increase in value which had been established for water associated lands, by the Blackwell Street sale. He agreed that in valuing the subject land the previously established relativity of values between waterfront and non-waterfront residential land had been disturbed, but only after consideration of the available evidence. Mr Friend is of the opinion that the evidence on which the original decision to disturb relativity did not provide a sound basis and the valuer could not then "shore- up" that evidence by researching further evidence. I do not accept this argument. The second sale is provided to the Court as evidence supporting the valuation, even though it did not form part of the original basis. The purpose of the hearing is to -- 5 of 8 -- 6 determine the fair unimproved market value of the land and any evidence which is capable of showing the valuation to be correct or incorrect, and led by either of the parties needs to be considered. It is clear that the sales evidence is not of land readily.comparable with the subject, although there are various features of these lands which set them apart from the non waterfront areas, sufficiently so, as I see it, to support Mr Coe,s initial decision to disturb the previous relativity. The subject land is, on the evidence, within an exclusive strip of riverfront residential land, well-held over the years with, until subsequent to the relevant date, no market activity to provide direct evidence of its worth. Mr Coe says that a more recent sale of an improved lot in this strip, indicates to him that his valuation is quite conservative. He chose not to use this evidence because it was subsequent to the relevant date and the movement in market values in the overall locality had not been confirmed by full investigation. Mr Coe says that he was well aware of the flood disability and potential for beach and site erosion suffered by the subject site. He does not agree that the site is unsuitable for the erection of a substantial structure because of this disability, although any new construction does need to comply with the Shires Policy No.67 which recognises the potential severity of the disability. Mr Coe admits that he has no knowledge as to whether the subject land would be more or less affected by flood or tidal surge ·than other land in this strip, but suggests that past damage to the "shack" may have been accentuated by its location very close to the river front boundary. -- 6 of 8 -- 7 Mr Coe is of the opinion that there are benefits as well as disadvantages emanating from the adjacent carpark. He sees the advantage of an unrestricted outlook and availability of guest parking as advantages which would equalise the disadvantages raised by Mr Friend. The subject land is valued at $2,000 less than the slightly larger sites immediately to the south, according to Mr Coe maintaining the previously established relativity of valuations between those lots and the subject. Apart from this maintenance of relativity he was unable to be specific as to the reasoning behind the lower valuation on the subject. He says that while the site is small, it has sufficient frontage to allow the erection of a substantial building in compliance with the minimum boundary set-backs required by the Building Act. His discussions with the relevant officer with the Calliope Shire Council indicate to him that there is a high probability of the Council using its discretion to reduce even further these minimum set-backs, because of the peculiar circumstances and size of the sites in this strip of residential land. Mr Friend has clearly demonstrated that the subject land, whilst enjoying exclusive residential riverfront location, also carries with it the potential for severe flooding and erosion from both the River and tidal surge, the need for compliance with restrictive building requirements, and the logical market resistance which would flow from the public knowledge of those facts. On top of these matters the site is of small size and adjoins a public carpark area. Then previous relativity of valuations of non-riverfront land has been significantly altered. What he has been unable to do however and as is required of him, is to prove that the Valuer-General's valuation is wrong. As he says the original basis for the Valuer-General's valuation is weak and that basis needed "shoring-up" by additional evidence. Nevertheless, he offers no -- 7 of 8 -- 8 evidence of weight to prove his main argument, that previous relativity of valuations should not be disturbed. The Valuer-General's evidence on the other hand has demonstrated that consideration has been given to factors affecting value, both positive and negative and consideration has been given to the available market evidence. While it would be seen to be preferable to have had more specific consideration given to the relativity between this land and the immediately adjoining riverfront sites to the south, particularly regarding the effect of the adjoining carpark on a residential property with "exclusive" characteristics and the size differences of these residential sites, I have not been convinced that the Valuer-General's valuation has been shown to be excessive or unreasonable. If different market perceptions emerge as to the value of specific classes of real estate within a locality it would be wro_ng for the Valuer-General to slavishly adhere to relativities of value which previously existed. I find that this appeal has not succeeded. It is therefore dismissed and the Valuer-General's valuation affirmed. (R.E. Wenck) Member of the Land Court. -- 8 of 8 --