De Winter v The Valuer-General [1991] QLC 250

Re: Appeal against Annual Valuation of the Valuer-General - City of Brisbane. V90-531. Marjorie De Winter V. The Valuer-General DECISION LAND COURT, BRISBANE 17th May, ·1991- Marjorie De Winter is the owner of Lot 2 on RP 11035, parish of South Brisbane, containing an area of 407 square metres. In the annual revaluation of the lands in the City of Brisbane as at 31st March, 1989 (effective date 30th June, 1990), the Valuer-General has valued this parcel at $250,000. An objection to this valuation was disallowed and the matter comes before this Court by way of appeal with the appellant contending in the Notice of Appeal to a value of $125,000. The subject land is situated at 7 Laidlaw Parade, East Brisbane, which is an old inner city suburb and Laidlaw Parade provides access to Lytton Road which is a major arterial road. It is developed with a single residence. It has a broad frontage of 19.4 metres to the Brisbane River. However, it has only a narrow frontage of 2.6 metres to Laidlaw Parade at a bend where the Parade turns to join Lytton Road. While it is zoned Residential B Intensity R4 in the relevant Town Plan, it falls to be valued under the provisions of Section 11 (1)(vii) of the Valuation of Land Act as land exclusively used for a single dwelling house. It is burdened by two easements - one along the river frontage over 77 .39 square metres for sewerage purposes; the other in favour of the neighbour at the rear of the allotment, such easement being related to the use of light, air and view of the [1991] QLC 250 -- 1 of 6 -- •• ( 2 Brisbane River. Evidence for the appellant was given by Mr Douglas Kaye :-who tenders a written statement highlighting the points he wished to emphasise to show that the Valuer-General has erred in the valuation. He says that from press releases made by the Department of the Valuer-General, he has gleaned that where there are no sales of unimproved comparable blocks of land, then improved sales are used with the value of the improvements being deducted to arrive at a land value. He says that the property at 29 Laidlaw Parade, East Brisbane, is just such a property and should be used as there were no sales of unimproved allotments in that area at about the relevant time. He says this parcel was passed in at auction on 29th August, 1987, with the last bid being $780,000. It was subsequently auctioned and sold on 12th November, 1988, for $825,000, and at an auction on 4th November, 1989, was sold for $1,000,050. He says this is a river frontage allotment of 1,255 square metres with a gentle slope from the street to the river. It has a 30 metre frontage which allows adequate access for heavy machinery and earth moving equipment. It is oblong in shape and has comparable magnificent views of the river. He then does a mathematical calculation commencing with the Valuer-General's valuation of the sale as at 30th June, 1987, of $100,000. He increases this figure at 133 1/3% per annum from the period 30th June, 1987, to 31st August, 1987, to conclude that the land value at that date was $132,000. He deducts this figure from the $780,000 as the last bid at the first auction to arrive at a value of the house_and other improvements of $657,800. He adds an increment from that date to 4th November, 1989, at 7 percent per annum, being the Bureau of Statistics rate of inflation to bring the value of the house and improvements at November, 1989, to $756,500 which gives him a value of the unimproved land at -- 2 of 6 -- • ( 3 30th June, 1990, of $382,400, which is an increase of 282.4 percent from June 1987 to June 1990. :- He then turns his attention to the subject land. He says that the valuation of the Valuer-General at 30th June, 1987, was $45,000. He increases this valuation by the 282.4 percent to arrive at a figure of $172,100. He makes a deduction of $26,500 to bring it into what he says is parity with the valuation on No 17 Laidlaw Parade, to arrive at $145,600, then says a further allowance should be made because of the existence of the easements. No 17 Laidlaw Parade joins the subject land. Both have river frontage, it has the same sewerage easement, it is uniform in shape with an area of 1123 square metres and has been valued by the Valuer-General at $580,000 ($516.4 per square metre). It has a 39.6 metre frontage to Laidlaw Parade and a similar width of frontage to the river. The subject on a per square metre basis has been valued at $614.2 per square metre despite its irregular shape with the small frontage to Laidlaw Parade and a smaller river frontage. There is no easy access even for a car and it is impossible to bring in heavy machinery or earth moving equipment if this is necessary to undertake repairs to the building. On the square metre basis, the subject is valued at $97 per square metre more than the adjoining property and the value should be reduced to at least the same rate per square metre as is applied to that block. However, because of the existence of the easement for light, air and view, trees cannot be grown nor any building work carried on in the easement area, contrary to the requirements of the easement and allowance should be made for this disability. Evidence for the Valuer-General was given by valuer, Mr I.R. Smith, who has relied on sales of unimproved parcels of riverfront land to arrive at his -- 3 of 6 -- 4 valuation. His first basis is of a parcel of 1156 square metres in Borva Street, Dutton Park, where 600 square metres is zoned Residential B R3 and 556 square metres as Open Space. It sold in November 1988 for $220,000. This site falls away rapidly from street frontage with obscure road access to the site. It has been developed since sale with a residence when a relaxation of Council policy as to the location of the home in relation to the river bank was given. He believes that this sale is slightly inferior to the subject land. His second sale is closer to the subject land, being situated with frontage to Wynnum Road, has an area of 771 square metres, is zoned Residential A and sold in February 1988 for $350,000. He has applied a value of $325,000 to the land in this revaluation. Mr Smith said that it is larger than the subject land, it is located on a busy road with prohibition of parking between 4p.m. and 6p.m. Monday to Friday. Like the subject land it also has a large sewerage main easement across the property. Despite the existence of the easement, building was permitted once the easement area was bridged. The sale site has good river access and overall he considers it superior to the subject land. In both of these cases, there has been relaxation by the City Council of requirements so far as the type of building and its location on the land is concerned. From enquiries he has made, he is satisfied that the Council would relax its policy requirements for the subject land as an unimproved block of land, having regard to the small size. He agrees that access for machinery is a problem with work to be carried out on the existing building but viewed as an unimproved block of land, he believesJhat the existing access would be sufficient. Mr Smith says that the method of valuation used by Mr Kaye is not an acceptable valuation method to arrive at an unimproved value of a parcel of land. He says that the exercise commences with a valuation of the Valuer-General as at -- 4 of 6 -- ( 5 30th June, 1987, when in fact that valuation was as at 30th June, 1986. The Valuer- General's valuation of that land as at 31st March, 1989, is $500,000. He says that Mr Kaye has accepted a valuation by the Valuer-General at one point but does not accept it at the end of his exercise. He says that it is impossible to deduce the value of the house and improvements on a calculation of an unsuccessful bid at an earlier point in time. What is required is to ascertain what is the added value which the improvements give to the land. Dealing with the adjoining parcel of land at 17 Laidlaw Parade which has been valued at $580,000, he says that this valuation reflects its size, frontage and general features. The valuation has not been made on a square metre basis as there is no evidence to support the conclusion that residential sites are purchased at a uniform rate per square metre. They are sold on a site basis. Mr Kaye's exercise has flaws in that the commencing date of valuation should be 30th June, 1986 and not 1987, and the current valuation is to be ascertained at 31st March, 1989 and not 30th June, 1990. A bid at auction which is not accepted is not a sale and it is sales evidence which is required. I accept the evidence of Mr Smith that residential allotments are sold on a site basis and not on a square metre basis. Mr Kaye has devoted a great deal of time in reaching his conclusion that an appropriate value for the subject land is something less than $145,600. However, the task of a valuer undertaking a valuation under the requirements of the Valuation of Land t\ct is to ascertain as best he can, what a prudent purchaser would be prepared to accept for a parcel of land at a certain date if offering it for sale on reasonable terms and conditions, assuming that the improvements did not exist. Such a prudent purchaser at that time would properly make enquiries as to -- 5 of 6 -- 6 what was being realised for river frontage land being sold as unimproved land. He would in those enquiries have become aware of the sales which had been used by Mr Smith and I am satisfied that no prudent vendor would be prepared to sell this parcel of land in its unimproved state on the 31st March, 1989, for less than the $220,000 realised for the Borva Street property and would look to the Wynnum Road property as a better guide;to value. He would have regard to the attributes and disabilities of the subject land and how restrictions on building have been waived in other cases where restrictions apply. Having done all this, I am satisfied on the evidence that no prudent vendor would sell for the figure contended for and would not be prepared to sell the land for less than the figure advanced by Mr Smith on his sales evidence. Accordingly, I find that the appellant has failed to show the Valuer-General has erred in the valuation and the appeal must fail. Accordingly, the appeal is dismissed and the valuation of the Valuer- General is affirmed. (D.J. Barry) President of the Land Court -- 6 of 6 --