Blucher Carter Pty Ltd v The Valuer-General [1993] QLC 49

Re: Appeal against valuation of Valuer-General - City of Townsville. V92-229. Blucher Carter Pty Ltd V. The Valuer-General DECISION (Hearing in Townsville) LAND COURT, BRISBANE 9th March, 1993 Blucher Carter Pty Ltd is the owner of an 840 square metre parcel of land situated at the corner of 167 Ross River Road and Bartlett Avenue. In the revaluation of the lands in the City of Townsville as at 31st March, 1990, the Valuer- General under Valuation Roll No 14140 valued this parcel at $50,000. An objection to the valuation was disallowed and an appeal has been lodged to the Land Court against the decision of the Valuer-General. In the notice of appeal the appellant contends to a value of $29,000. Evidence was given by Mr Miles Blucher and he relates that the property was purchased in early 1990 for $55,000. It had a home erected upon it which was in poor · repair with some white ant infestation. He was aware of the white ant problem when he purchased the property. Subsequently, part of the building was demolished and the house was renovated, restumped, re-roofed and extended. Mr Blucher is an architect by profession and . it was his intention to use part of the building as his professional office. Application was made for and approval given by the Council of the City of Townsville for the development of a home occupation (architect) on the allotment, subject to the following conditions - II a) The floor space use (whether temporarily or permanently) shall not exceed 30 square metres in area. b) Only one sign of maximum size 0.25 square metres and bearing only the name of the occupier and the occupation~s to be displayed. c) Goods are not to be displayed publicly on the premises: [1993] QLC 49 -- 1 of 5 -- 2 d) The business is to be conducted only by a person resident on the property and no other employees are to be engaged. e) The use is to be conducted in such a manner so as not to cause nuisance or annoyance to persons or property not associated with the use. " He speaks to the grounds of his appeal. His main ground is that the valuation is out of relativity with other properties and makes reference to parcels closer to the commercial area and with similar use on Ross River Road, a residence used as home occupation. They are currently valued at $25,000. He believes the previous valuation of the subject land at $29,000 is high compared to those properties with the same use but he accepts that valuation as reasonable. Mr Blucher says that the valuation does not properly reflect the use of the land which is zoned "Residential C" and can be used for a 3-bedroom residence or for two home units, each with two bedrooms. He says that the current use with the town planning consent establishes that the site is being utilised to its full potential as a single dwelling under the current town planning requirements. He makes reference to and tenders a brochure issued by the Lands Department and to a statement in that brochure in dealing with valuations to the effect that with few exceptions property valuations are calculated on the unimproved freehold basis but with an exception for land exclusively used for a single dwelling house in an area zoned for a higher use. This land is to be valued as an ordinary homesite and that a house may include a flat or furnished room for rent yet still be a single dwelling house. In the subject case he says the land is developed to its full potential and an area of 30 square metres is allowed to be used for home occupation. He also makes the point that every home in Townsville has the potential to be used as a home occupation and it is not just to apply higher values to certain properties. In cross-examination, Mr Blucher explained that the property was owned by a family service company, his business company - Miles Blucher Pty Ltd - pays rent to the company for the office accommodation. The residential section is occupied by his sister-in-law free of rent. Evidence for the Valuer-General was given by valuer, Mr B.J. McComiskie, who says that the land has been valued for its present highest and best use as an -- 2 of 5 -- 3 architect's office. As a basis of valuation he has relied on certain sales. I do not propose to discuss those sales as there is no real challenge to the quantum of valuation. The challenge is that it has been valued incorrectly and should be valued as a single dwelling house as set out in the evidence of Mr Blucher herein'. As to the properties referred to by Mr Blucher as his basis' of valuation, Mr McComiskie has searched the records of the Valuer-General and has ascertained that these properties have been valued under the concessional valuation provided by section 11 (1 )(vii) of the Valuation of Land Act as land exclusively used for purposes of a single dwelling house. On the evidence given by Mr Blucher, the owners of these parcels would not be entitled to the concessional valuation. They should be valued in the same way as the subject land and the valuations should be reviewed. II Section 11 (1 )(vii) of the Act insofar as it is relevant here reads - In making, pursuant to this subsection, the valuation of the unimproved value of land exclusively used for purposes of a single dwelling house ... , any enhancement in that value for that the land ... has a potential use for industrial, subdivisional or any other purpose shall . be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made. In this paragraph - 'a single dwelling-house' means - (a) a dwelling used solely for habitation by not more than one family; (b) a dwelling occupied by the resident owner and used solely for habitation - (i) part of which stands converted for use as a flat; or (ii) part of which is used or for use as a furnished room or furnished rooms, by a person or persons other than the owner's family; or (c) a building used solely for habitation and that consists of 2 flats, one of which is occupied by the resident owner;'" The facts in this matter bear similarity with the facts in Re: Appeals against Valuations of the Valuer-General - W.G. and C. John v. The Valuer-General - City of - · Townsville (1988-89) 12 Q.L.C.R. 219. In the decision at page 220, I _said - -- 3 of 5 -- 4 Evidence was given by Mr John in support of the grounds of appeal. He says that they reside in the home upon this land and since 1981 have been registered real estate agents. They have conducted their real estate business from one of the rooms in the house. While the land is zoned 'Residential D' they have consent of the Local Authority for 'Home Occupation (real estate agents office)'. Mr John argues that they are being penalized with the dramatic increase in the valuation of the land and are facing a heavy rate burden. He says that by definition the Council's 'Home Occupation' permit is only allowable from a residential house, it is not transferable nor does it have a commercial value and is not a saleable asset. He says that the valuation of the seven neighbouring properties have either been reduced or remained the same and in particular the two adjacent properties have been reduced. These are all parcels of land used tor residential purposes. Evidence for the Valuer-General was given by Valuer Mr R.M. Bein, who says that the land is zoned 'Residential D' under the relevant town plan and as such it is capable of multi-unit development with six units covering an area of 1000 square metres. He has valued the land in its zoning and relied on a sale in Marine Parade of 1 resubdivision with an area of 1012 square metres. He has applied $75,000 to that allotment and here he has valued the two allotments at $150,000 and made an allowance of 10% as a bulk allowance. Mr Bein says that if he had been valuing the parcel under the concessional valuation for a home exclusively used as a single residence he would have applied a value of $60,000. He says at the previous valuation as at 1982 the land was valued under the concessional valuation applicable to land exclusively used for the purposes of a single dwelling house where by the provisions of Section 11(1}(vii) of the Valuation of Land Act any enhancement in that value for that the land has a potential use for a higher purpose should be disregarded. It was not until he was undertaking his investigations of the current valuation that he became aware that a real estate business was being operated from the residence and he formed the conclusion that as the house was no longer exclusively a single dwelling house the landholders were not entitled to the concessional valuation which applied under Section 11 ( 1) (vii) of the Act. The burning issue here is to determine whether Mr Bein is in error in concluding that the land is not 'exclusively used for purposes of a single dwelling house•. The matter has been considered by this Court and Superior Courts over the years and was considered by the High Court of Australia in Council of the Municipality of Randwick v. Rutledge and Others (1959} 102 C.L.R. 54 where at page 93 Windeyer J. said: 'The words 'exclusively' and 'solely' are familiar in fiscal and rating law. Where an exemption from rating depends upon the use of land exclusively for a particular stated purpose, then the use must be for that purpose only (Nunawadinq Shire v. Adult Deaf and Dumb Society of Victoria (1).) The question arises for example, when part of the subject land is used tor the relevant purpose and another part tor a different purpose (Sisters of Mercy Property Association v. Newtown and Chi/well Corporation (2).) The presence of 'exclusively', 'solely' or 'only' always adds emphasis; and is not to be disregarded (Rea. v. Cockburn (3).) When such words are present, it is a question of fact whether the land is being used tor any purpose outside the stipulated purpose. As Kitto J. said in Lloyd v. Federal Commissioner of Taxation (6), such words confine the use of the property to the purpose stipulated and prevent any u_se of it for any purpose, however minor in importance, which is collateral or independent, as distinguished from incidental to the stipulated use. Even without such words, an exemption from rating based upon use or occupation for a particular purpose or in a particular manner can only apply when the property is so used that it can properly be described as used for that purpose or in that manner, any other user being merely incidental, or at least not inconsisterit with such main user.' Here it is agreed that a real estate business is carried on in a part of a residence and in no -- 4 of 5 -- • 5 way can it be suggested that this use is incidental to a residential use. It follows that I find that Mr Bein has correctly fulfilled his obligations under the Act and the land does not attract the concessional valuation available under Section 11(1)(vii) but falls to be valued for its highest and best use. I am conscious from statements made in evidence that the appellants feel deeply aggrieved at what they consider to be an injustice but no doubt they could regain the concession by removing the real estate business from the home and it would then be exclusively used for purposes of a single dwelling house and upon application, the Valuer-General would review the matter. • The landholders in that case exercised the right of appeal to the Land Appeal Court against this decision. The appeal was dismissed on 18th June, 1990. In that case the owners of the land occupied the home and Mr John conducted his real estate business from the home. In this case one company owns the land and rents part of the premises to another company for an architect's office and the balance is occupied rent-free by Mr Blucher's sister-in-law, but this is of no consequence. In the final result I find that the owner is not entitled to the concessional valuation under Section 11 (1)(vii) of-the Valuation of Land Act and the Valuer-General has correctly valued the land in accordance with the provisions of the Act. The evidence supports the value adopted by the Valuer-General and the appeal fails. Accordingly, the appeal is dismissed and the valuation of the Valuer-General is affirmed. (D.J. Barry) President of the Land Court -- 5 of 5 --