Courtice v The Valuer-General [1991] QLC 168

Re: Appeal against Annual Valuation of the Valuer-General - City of Caloundra. AV91-174. Timothy D.H. Courtice V. The Valuer-General DECISION LAND COURT, BRISBANE 13th November, 1991 Mr Courtice is the owner of Lot 6 on RP 60164, parish of Bribie, containing 739 square metres. In the annual revaluation of the lands in the City of Caloundra as at 31st March, 1990 (effective 30th June, 1991) the Valuer-General has valued this parcel at $280,000. An objection to this valuation was disallowed. Mr Courtice has exercised his right of appeal to the Land Court and in his notice of appeal contends to a value of $120,000. The subject land is situated at 21 The Esplanade East, Kings Beach, which is a bitumen carriageway with concrete kerbing and channelling. It is above street level and has a gentle to medium fall to the south. It is well elevated. It is zoned Residential C under the relevant Town Plan and has erected upon it, a building comprising three 2-bedroom flats, one bed-sitter flat and also a masonry block building at the rear which was formerly used as a caretaker's residence. Evidence was given by Mr Courtice to the effect that he purchased this property on 31st July, 1987, for $205,000 with the expectation that it would be attractive to holiday tenants. Despite having the property in the hands of various letting agents, he found that occupancy was low and in the result he decided to accept permanent tenants and this has proved more successful with the flats [1991] QLC 168 -- 1 of 6 -- 2 usually fully occupied but at a lower rental than can be commanded with the holiday trade. He is of opinion that he would be fortunate to realise the Valuer- General's unimproved value of $280,000 for the land and the improvements thereon. Valuation evidence was given by valuer, Mr D.L. Corbett, who says that the allotment has a frontage of 14.8 metres to The Esplanade which is a fairly narrow bitumen sealed carriageway. Opposite is an off-street parking area for tourists visiting Centaur Park which is an area offering views along Bribie Beach. It has picnic facilities of tables and barbecues. The Esplanade carries a fair volume of weekend traffic to Caloundra Headland about 1 kilometre to the east. There is a southerly aspect with ocean views and along the eastern beach of Bribie Island with some minor restrictions from tree growth within the parkland opposite. As a basis of valuation he has looked at certain Residential C zoned land sales, the first being Lots .2 and 3 on RP 52764 with an area of 1432 square metres at 28 Victoria Terrace, Caloundra, which sold on 13th June, 1989, for $616,000. He says this is situated on the corner of Victoria Terrace and King Street on the Caloundra Headland with ocean views to the north-east and the east. There is some northerly restriction by trees in parkland opposite. He considers this a sought-after locality superior to the subject land. It has two street frontage and the existing improvement is a high-set Chamferboard dwelling with terracotta tile roof which is about 30 years old. He has analysed the value of the improvement at $66,000 leaving a land value of $550,000 ($384 per square metre). He said the parcel has a frontage of 31.8 metres to King Street; 43.3 metres to Victoria Terrace; and a depth of 41.6 metres. His next sale is at 38 Victoria Terrace, Caloundra, where Lots 3 and 4 -- 2 of 6 -- - I 3 on RP 60522 with an area of 1138 square metres sold on 26th June, 1989, for $503,275. The only improvements were fencing and clearing and he analysed the sale for an unimproved land value of $500,000 ($439 per square metre). It has excellent ocean views over Caloundra Headland with an easterly aspect far superior to the subject and is perhaps the most desirable parcel on the headland. It rises gradually from street frontage and could have rock present. Site access is good, the frontage is 28.1 metres and the depth 40.37 metres. Both of these properties were purchased by Pronor Pty Limited and he says that the purchaser is a developer of units. His next sale is an after date sale on 14th August, 1990, when Lot 1 on RP 57756 with an area of 637 square metres at 17 Ormonde Terrace sold for $206,000. There were no improvements and he analysed the sale to show $323 per square metre. It has frontage to Ormonde Terrace of 14.5 metres plus truncation and 29.6 metres to Orvieto Terrace. He says it is located directly opposite Kings Beach and the land is level with Ormonde Terrace with a gentle rise to the north east. It was vacant at the time of sale and has since been developed. He has had discussions with the selling agents and was informed that the vendors were not under financial pressure and the market was fully tested. While the sale was subsequent to the relevant date, Mr Corbett considers it is of importance in assessing the unimproved value of the subject because the economic circumstances prevailing at the time of sale were fairly comparable to ttie relevant date and believes it is in order to bring this sale into calculations. Site access from Ormonde Terrace is direct and easy. Because of its position opposite the surfing beach and the excellent oceans views available make this land superior to the subject land. Mr Corbett says that the Ormonde Terrace land has, since purchase, -- 3 of 6 -- I I 4 been developed with six 2-bedroom units. He is of opinion it is superior and forms an upper level of value for unit land. The purchase price shows $34,500 per unit. Mr Corbett has had discussions with an officer of the Town Planning Department of the Caloundra City Council and was advised that the maximum likely development of the subject land would be five units although, on an area basis, more (probably six units) could be accommodated. He arrives at a value of $175,000 based on 5 units @ $35,000 per unit site. An alternative approach is to have regard to the Ormonde Terrace sale. He says this has the advantage of good road frontage which is a favourable consideration for development permitted by the zoning and is opposite Kings Beach. He considers that the subject would be less valuable than that parcel and a factor of 15 percent would reflect this difference. He adopts a rate of $275 per square metre to arrive at his valuation of $203,225 which he rounds to $200,000. Evidence for the Valuer-General was given by Valuation Manager, Mr G.J. Dunn, who lists five sales in his written valuation. Two of the sales are zoned Residential B and another Residential E but his real basis of valuation is to be found in two of the sales used by Mr Corbett. These are at 38 and 28 Victoria Terrace. He notes in his valuation that both of these sales occurred at the peak of the market. Speaking of 38 Victoria Terrace he says it is well elevated with good easterly sea views but without views of the surf beaches. It is an Esplanade block with a gentle south-easterly crossfall and is above street level. Victoria Terrace is a full-width bitumen carriageway with concrete kerbing and channelling. Mr Dunn says that access is difficult because of the steep curve in the road making ingress and egress dangerous. Overall he considers it is superior. In the revaluation he has valued this parcel at $405,000 ($355 per square metre). He describes the -- 4 of 6 -- . ' 5 parcel at 28 Victoria Terrace as being well elevated with easterly sea views. It sits on the truncated corner of Victoria Terrace, King Street and Ernest Street which are all sealed and also with concrete kerbing and channelling. It has the advantage of corner and rear access. He says it is not as well located as the subject land, it is larger and has inferior views. There is a dwelling upon the land and it has been valued as land exclusively used for the purposes of a single dwelling house with a concessional valuation under Section 11 (1) (vii) of the Valuation of Land Act at $275,000. He says that if it was being valued as a multi-unit site, it would be valued at $515,000 ($359 per square metre). Mr Dunn says that he was advised by the Town Planning Department of the Council that the subject land could accommodate six units and his calculations of the formula set out in the planning by-laws confirm that this is so. I have considered the evidence in this matter and the submissions made by Mr Cuppaidge, Counsel for the appellant, and Mr Ryan, Counsel for the Valuer-General. I have here a case where an owner on 31st July, 1987, purchased this land and the substantial building erected upon it for $205,000. The unimproved value of the land at that time was $148,000. In the revaluation as at 31st March, 1988, the parcel was valued at $207,500 which is more than the total purchase price. Mr Cuppaidge suggests that this indicates that this particular valuation on the evidence of the sale was "out of kilter". Indeed I find it difficult to reconcile the valuation with the sale in the absence of any evidence to suggest that the sale was other than one made in the open market. The valuation subsequently rose to $280,000 ($379 per square). The valuation applied by the Valuer-General to the parcel at 38 Victoria Terrace reflects $355 per square metre and the figure which would have been applied to 28 Victoria Terrace would have been $359 per square -- 5 of 6 -- . ' 6 metre if the concessional valuation did not apply. These properties were purchased by a unit developer, they are well located and of a suitable size for a substantial development and it is agreed by the valuers that both of these sales are superior. The subject land has been valued at $379 per square metre. The subject land is disadvantaged by its narrow frontage and I prefer the evidence that while it might be possible to construct six units upon the land, such a development would not give as desirable a result as a development with a lesser number of units. The sale at Ormonde Terrace used by Mr Corbett is an after-date sale but his evidence that the economic circumstances prevailing at the time of sale were fairly comparable to the conditions at the relevant date has not been challenged and I find that it does assist in arriving at a value of the subject land. I find on the evidence that the rate applied by the Valuer-General on a square metre basis is too high when compared to the rate applied to the parcels in Victoria Terrace where the valuers both agree the properties are superior. 17 Ormonde Terrace has the advantage of having frontage to two streets to provide flexibility in development, it is better located in relation to access to the beach and would be a preferred holiday letting proposition. It has some disadvantages with traffic flow. I propose to adopt the rate of $300 per square metre for the subject land in relationship to that sale which would result in a valuation of $220,000. Accordingly, the appeal is allowed, the valuation of the Valuer-General is set aside, and the unimproved value of the subject land is determined at Two hundred and twenty thousand dollars ($220,000). (D.J. Barry) President of the Land Court -- 6 of 6 --