Cherbaucbich & Anor v The Valuer-General [1991] QLC 293

L Re: Determination of Unimproved Value - City of Brisbane - Division of Balmoral. AV90-747 G.R & O.E. Cherbaucbich -v- The Valuer-General DECISION LAND COURT, BRISBANE. 1st March, 1991. This appeal is against the determination by the Valuer-General of an unimproved value of $200,000 for a "Residential BR4" zoned site situated at the south western corner of the junction of Norman Crescent and Wynnum Road, Norman Park. The site contains an area of 814 square metres and is more particularly described as Lot 92 on RP 12508, Parish of Bulimba. It is encumbered by registered access easement no. A97025 in favour of Lots 88 and 99 on RP 12508. The easement is located along the rear boundary of the land. Erected on the site is a large two-storey brick dwelling, the first floor of which is owner-occupied and the ' ground floor of which has been converted to two flats. The appellants contend within the notice of appeal for an unimproved value of $54,000. The conduct of the appeal for the appellants was in the hands of their son one John Kerr. Mr Kerr tendered a letter from the firm Ray White, Real Estate (Morningside Branch). The Author of the letter is John Rosevear (Director) who [1991] QLC 293 -- 1 of 6 -- - Page 2 - indicated that the property has been listed for sale with his Office since 28th February, 1984. Mr Rosevear says that developers have discounted the property for further development due to its ever present traffic noise problem emanating from Wynnum Road. He says that due to the noise problem the asking price has been reduced dramatically with no sale resulting. Mr Rosevear was not called in evidence. Now Mr Kerr says the appellants are really not against the valuation of the property but say the acute traffic noise problem should be taken into account. His appellant parents have had to move from a front bedroom to the back of the dwelling house as they claim it is too noisy on the Wynnum Road frontage. Mr Kerr also stressed that the property has been on the market with all agents in the area at many differing prices. All inspecting parties expressed their approval of the outlook from the property but any prospect of sale is always killed by the traffic noise factor. Wynnum Road carries traffic in two lanes each way. The appellants say within the notice of appeal that the original asking price for the property was $300,000 and that this price has been reduced to $200,000. They contend that the property is unsaleable at that price. They express the view that the current market price for the property is $150,000. The appellants were not called in the case to furnish evidence in support of these grounds of appeal. The valuation appealed against was made by Bruce Clive Skinner, a registered valuer in the employ of the Department of Lands. Mr Skinner describes the subject site as being of moderate elevation at approximately 25 metres AHD. In ' its origir~.al state, he says the land was approximately 5 metres above the Wynnum Road frontage and tapered down to about 1 metre above Norman Crescent towards the south east corner, and then rose moderately from the Norman Crescent frontage to the south west. Mr Skinner further says that views are available from the site, particularly from the 1st floor of the building, to the north west down the Bulimba -- 2 of 6 -- - Page 3 - Reach of the Brisbane River and sweeps to the south west to include the Old Teneriffe Power Station, New Farm Park, the Story Bridge and over the Humbug Reach of the river to the Central Business District and the mountains beyond. Mr Skinner also confirms that Wynnum Road carries a big volume of traffic with its companying noise problems. Mr Skinner has made the valuation particularly in relation to the following sales evidence:- Lots 1 and 2 on RP 103620, Parish of Bulimba (38 Wynnum Rd, Norman Park) containing an area of 771 square metres which sold on 9th February, 1989 for $350,000 - analysed unimproved value $340,000. Applied unimproved value $325,000. These sites were purchased with the intent to construct a single unit dwelling house. They are river frontage lots facing Wynnum Road, and were originally level with and falling from the road to the river frontage. Views are available up the Humbug Reach of the river to Shafton House and across the river to the Central Business District. Mr Skinners says these sites combine to comprise a better site than the subject land due to the direct river frontage, although they are smaller and with inferior zoning (Residential A) and with inferior access than that to the subject land from Norman Crescent. Lot 2 on RP 43134, Parish of Bulimba (138 Wynnum Rd, Norman Park) containing an area of 610 square metres which sold on 13th August, 1988 for $90,000 - analysed unimproved value $89,200. Applied unimproved value $90,000. Mr Skinner says that this was an early sale in comparison with the relevant date of 31st March, 1989 in a rising market. It is a narrow block level with Wynnum Road and fairly level for a short distance then falling very steeply to the rear. Mr Skinner points out that although it is an elevated site, views are restricted by buildings to a north westerly outlook only to part of the New Farm Park across the river and down the Bulimba Reach of the river. Mr Skinner is of the opinion that the sale property is considerably inferior to the subject land due to its smaller size, inferior access, zoning and views. He ·also stresses that the sales evidence in Wynnum Road reflects the value of land with an inherent traffic noise problem. Mr Skinner told us that this valuation is as a result of his first inspections in the area. He walked the streets to appreciate the views and the traffic noise about which he was well and truly aware at the time of making the valuations in the area. -- 3 of 6 -- - Page 4 - Mr Skinner believes the "Residential BR4" zoning does not add to "Residential A" zoning value in the case of the subject site and stresses that the sale site at 38 Wynnum Road has a quite definite traffic noise being virtually at street level. Mr Skinner expressed the view that if the subject land did not experience traffic noise then the appropriate valuation would be in the order of $250,000 to $300,000. By way of answer to the suggestion by the appellants within the grounds of appeal that "Our's and adjoining properties are unsaleable due to the noise on Wynnum Rd, and that no sales have taken place during the past two years", Mr Skinner produced in evidence details of some 12 sales of properties in that road at Norman Park during the period 22nd April, 1988 to 13th June, 1990. I note that a fair percentage of these sales are in the section of Wynnum Road between Norman Creek and Wendell Street and accordingly in reasonable close proximity to the subject property. I also note that all but 2 of the sales sites appear to have a river frontage. One which hasn't is Lot 2 on RP 43134 (one of Mr Skinners' basic sales). The other is the property adjoining the subject land at 133 Wynnum Road containing an area 1636 square metres on 25th May, 1989 for $800,000. This is certainly direct evidence rebutting the suggestion that there have been no sales within the last two years. During the course of the case I intimated that I would in all probability take a view of the subject land and the sales evidence. This has been done and I have stood in Norman Crescent adjacent to the subject site to observe traffic patterns ' and hear the traffic noise in Wynnum Road. Now is does seem strange to me, m VIew of the sales evidence produced by the Valuer-General, that the subject land and improvements (very substantial two storey brick building) cannot realise more than $150,000 on the market, albeit with the traffic noise problem. Certainly all the sales in Wynnum -- 4 of 6 -- - Page 5 - Road suggested it would be worth more, and if the appellants are desirous of selling (and they appear to be) then it may be that the acceptance of a figure of $150,000 for the property may place them in a position of being over desirous of selling and not bona fide vendors. It is best to turn to the definition of unimproved value within the Valuation of Land Act (Section 12) to ascertain what unimproved value is. It reads:- "For the purposes of this Act "unimproved value" of land means - (a) In relation to unimproved land, the capital sum which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require; and (b) In relation to improved land, the capital sum which the fee-simple of the land ·might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist." Now if the owners accept $150,000 for the property then is seems they may not be bona fide sellers but as aforesaid very much over anxious sellers, especially in view of the sale of the adjoining property at 133 Wynnum Road. Certainly there is more land in this sale site and it is improved with a large old house and it may not have as much noise nuisance (it is well elevated above Wynnum Road and has not the corner position for noise exposure), but the price it has realised is so much more than $150,000., I note that the Valuer-General has valued the land at 133 Wynnum Road at $350,000 as one site and it has rear access over the registered easement through the subject land to Norman Crescent. Again it seems incongruous that the subject property is only worth $150,000 in comparison with the sale of land only at 138 Wynnum Road at $90,000 -- 5 of 6 -- - Page 6 - since, as Mr Skinner says, this sale lot is considerably inferior to the subject land without consideration being given to the improvements. Taking an overview of the evidence as a whole I cannot conclude that the subject land, if vacant and unimproved at relevant date, would not realise $200,000 in a bona fide sale. Certainly the value claimed within the notice of appeal seems to be nowhere near the market value at relevant date. I accordingly find that the unimproved value as determined by the Valuer-General in the sum of $200,000 is reasonable and that the appeal be dismissed. (C.H. Carter) Member of the I ,and Court. -- 6 of 6 --