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Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925[2018] QLAC 7

Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925[2018] QLAC 7

LAND APPEAL COURT OF QUEENSLAND

CITATION:

Valuer-General v Body Corporate for ‘Tennyson Reach’ Community Titles Scheme 39925 [2018] QLAC 7

PARTIES:

Valuer-General

(appellant)

v

Body Corporate for ‘Tennyson Reach’ Community Titles Scheme 39925

(respondent)

FILE NOs:

LAC No. 001-18

Land Court No. LVA1175-16

DIVISION:

Land Appeal Court of Queensland

PROCEEDING:

Appeal from the Land Court of Queensland

ORIGINATING COURT:

Land Court of Queensland

DELIVERED ON:

8 October 2018

DELIVERED AT:

Brisbane

HEARING DATE:

28 August 2018

THE COURT:

Dalton J

PA Smith, Member of the Land Court

WL Cochrane, Member of the Land Court

ORDERS:

  1. Allow the appeal;
  1. Set aside the orders below;
  1. Remit the matter back to his Honour below to make the decision according to law;
  1. Any application for costs, and supporting written submissions, for this appeal, are to be filed and served by 4pm 22 October 2018;
  1. Written submissions in response to any application for costs are to be filed and served by 4pm 5 November 2018; and
  1. Any written submissions in reply are to be filed and served by 4pm 12 November 2018.

CATCHWORDS:

REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – EVIDENCE – where appeal is against valuation expert evidence – where both expert valuers apply a different highest and best use – where one expert assesses the site as impact assessable and the other expert assesses it as code assessable – where one valuer adopts a conservative approach – where valuation methods are not discernible from the evidence – where valuer adopts a range of figures to apply value – where the sales are alleged not to be sufficiently similar for comparison purposes – where valuers incorrectly have regard to material subsequent to the sale – where the learned Member found the evidence of an expert to be unexplained – where valuation expert is argumentative when giving evidence – where the evidence before the learned Member was poor

APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – HEARING OF APPEAL – PROOF AND EVIDENCE – where the onus of proof is on the balance of probabilities – where it is alleged the appellant did not meet the onus of proof

APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – POWERS OF COURT – duty of  the Land Appeal Court to rehear valuation matters on the evidence before the Land Court – whether it is appropriate to speculate on the learned Members findings as to witness credibility – whether the Land Appeal Court can remit valuation matters back to the Land Court

REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – whether the learned Member followed the two-step valuation processes required for determining an appeal against an objection decision on a valuation

EVIDENCE – PROOF – BURDEN OF PROOF – section 169 Land Valuation Act 2010 – onus of proof – balance of probabilities – where alleged that the learned Member failed to properly apply the onus – where it was alleged that the learned Member erred in understanding s 170(b) of the Land Valuation Act 2010 – presumption of correctness – where the appellants cases relate to the Valuation of Land Act 1944

Land Court Act 2000 s 55, s 57

Land Valuation Act 2010 s 169, s 170

Valuation of Land Act 1944 s 13(7)

Albion Mill FCP Pty Ltd & Anor v FKP Commercial Developments Pty Ltd [2018] QCA 229, applied

Brisbane City Council v Mio Art Pty Ltd & Anor [2012] 2 Qd R 1, followed

BT Dillion v Valuer-General (1987) 11 QLCR 231, applied in part

Crompton v Commissioner of Highways (1973) 32 LGRA 8, cited

House v The King (1936) 55 CLR 499, cited

Makita v Sprowles (2001) 52 NSWLR 705, cited

Meiers v Valuer-General [2012] QLC 19, applied

Minister for Immigration and Border Protection v SZVFW & Ors [2018] HCA 30, cited

Norbis v Norbis (1986) 161 CLR 513, cited

Spencer v The Commonwealth (1907) 5 CLR 418, followed

APPEARANCES:

DP O'Brien QC with JP Hastie for the appellant

LD Hinckfuss (solicitor) for the respondent

  1. [1]
    DALTON J:  This is an appeal against a decision of Member Isdale who allowed an appeal against the Valuer-General’s valuation of land.  The land is owned by the respondent; is in King Arthur Terrace, Tennyson, and the Valuer-General valued it at $18,500,000 as at October 2015. 
  1. [2]
    There are three separate lots of land, together amounting to an area of 18,318m2.  Two are adjoining lots and contain three medium‑rise residential towers with underground car parking.  The third lot of land is situated on the other side of King Arthur Terrace some small distance away.  It contains a gymnasium and other recreational facilities that are used by the residents of the towers.
  1. [3]
    Two valuers gave evidence before Member Isdale. Mr Ladewig for the Body Corporate valued the land at $14,500,000. Ms Wang for the Valuer-General supported the $18,500,000 value.

Town Planning Evidence

  1. [4]
    As well, the Valuer-General called a town planner. Member Isdale accepted the town planner’s evidence and there is no appeal from that decision. The town planning evidence established two things. The first was that the highest and best use of the land was a more intense residential use than that to which the land is currently being put. On the basis of the town planning evidence, Ms Wang’s view was that the highest and best use of the subject land was to have three residential towers on sites 1 and 2, as there are now, but with 15 storeys each, comprising 12 storeys of residential dwelling above three storeys of above-ground car parking. Further, to have a low to medium density residential development (up to three storeys) on the site which is currently occupied by the gymnasium. The effect of these changes would be to increase the gross floor area of the residential buildings on the three lots of land by about 20 per cent. Mr Ladewig worked on the basis that the current use was the highest and best use.
  1. [5]
    The second point established by the town planning evidence was that further development on one of the sites which currently contains one residential tower was code assessable rather than impact assessable. Mr Ladewig, the valuer for the Body Corporate, had worked on the basis that it was impact assessable.
  1. [6]
    To summarise, the Member below found that, so far as town planning issues were concerned, the Body Corporate’s valuer, Mr Ladewig, worked on a more conservative basis than Ms Wang – [18] of the judgment below.  Perhaps it is implicit in the Member’s decision, but it is as well to state it, the correct conclusion from the evidence before the Member is that Mr Ladewig wrongly took a more conservative view of these issues.
  1. [7]
    The valuers adopted a direct comparison method of valuation based on comparable sales.[1]  Because none of the sales before the Court were closely comparable to the subject land, the conclusion I have recorded at [6] above is of limited weight in this case.  For that reason I am not of the view that grounds of appeal 2(a) or (b) should succeed.

Onus of Proof

  1. [8]
    By s 169(3) of the Land Valuation Act 2010 (LVA) the appellant Body Corporate bore the onus of proof on the balance of probabilities in the hearing below.  The Valuer‑General’s first ground of appeal was that the Member below failed to properly apply the onus of proof and, in a closely associated way, erred in understanding s 170(b) of the LVA.  In those circumstances, I begin my consideration by looking at Mr Ladewig’s comparative sales.

Mr Ladewig’s Evidence

  1. [9]
    Mr Ladewig put three sales before the Court:
  1. (a)
    the old ABC site on Coronation Drive, Toowoong;
  2. (b)
    a sale at 20 Festival Place, Newstead, and
  3. (c)
    the old RSPCA facility at Yeronga. 
  1. [10]
    In his part of the joint statement of expert evidence made to the Court below, Mr Ladewig discussed these sites, pointing out similarities and differences, and making adjustments so that they were more comparable to the subject land. He concluded that they yielded the following adjusted rates per square metre:
  1. (a)
    $1,300;
  2. (b)
    $2,688;
  3. (c)
    $237.[2]
  1. [11]
    In a way which is not discernible from his evidence, Mr Ladewig then concludes that the Tennyson Reach land should be valued in a range between $775 to $825 per square metre.[3]  It was submitted on behalf of the Body Corporate that what Mr Ladewig wrote at p 46 of the valuer’s joint statement explained how he determined this range.  However, it does not explain it in any way which allows the Court to access, and critically analyse, Mr Ladewig’s process of reasoning.[4]  All Mr Ladewig would say about the matter in oral evidence was that these figures were his opinion as a valuer.[5]
  1. [12]
    I fully accept that questions of a valuer’s judgment necessarily play a significant part in assessing value in any case, and that opinion on valuation is an evaluative conclusion, rather than a conclusion which is uniquely right or wrong.[6]  However, where the range of dollar rates per square metre is so large as that generated by the sales said to be comparative by Mr Ladewig, and where Mr Ladewig has selected a fairly specific range, well in the lower half of his sales evidence, it is necessary for him to allow the Court to understand his thinking. 
  1. [13]
    Mr Ladewig proceeded to apply his range of dollar per‑square‑metre rates over the total area valued by the Valuer-General (18,318m2).  This gave him a range of between $14,196,450 and $15,112,350 as the value for the subject land.  He then selected the halfway point between these amounts, $14,654,400, and rounded that down to $14,500,000.  Mr Ladewig gave no reason for adopting the halfway point of the range.  Once again, there is an unacceptable gap in his reasoning, although perhaps not so exceptional as the first.
  1. [14]
    In addition to the above criticisms of Mr Ladewig’s evidence, the Valuer-General says that his Sales 1 and 2 were not close comparators, and that his Sale 3 should not have been included in any analysis of the value of the subject land because it was not sufficiently similar to the subject land, in the sense discussed in Crompton v Commissioner of Highways,[7] to be regarded as comparable at all.
  1. [15]
    The Valuer-General contended that on this state of the evidence the Member below ought not to have concluded that the Body Corporate had discharged its onus of proof to show that the Valuer-General’s valuation was wrong. To assess this argument it is necessary to discuss Mr Ladewig’s three sales in some more detail.
  1. [16]
    Sale 1 was the old ABC site at Toowong.  The Valuer-General’s counsel described this sale as “significantly superior” in argument.  Mr Ladewig allowed that it was superior.
  1. [17]
    It was a somewhat smaller area of land (14,999m2), although still a large block.  It was superior in the sense that it was a single, regular shaped site, with a long river frontage.  It was also superior because, although smaller in area, it had the potential to yield over 550 units.  As well, the site was superior because it was zoned “Major Centre Zone” and located in Toowong, close to railway facilities, sophisticated suburban facilities, and much closer to the CBD than the subject land.
  1. [18]
    The site did have difficulties not shared by the subject land. It was associated with a cancer cluster which received considerable publicity between 2002 and 2014. As well, it was known before the valuation date that the development application for the property was the subject of appeal through the Courts. As well, there were development requirements known before the valuation date as to preserving a heritage-listed house, some trees and requirements as to public access to the river and public open space.
  1. [19]
    The second sale relied on by Mr Ladewig was one which the Valuer-General’s expert, Ms Wang, also relied upon.  It was a much smaller site (8,184m2).  It was considered by Mr Ladewig and Ms Wang to be superior to the subject site.  It was sold with planning approval for a 25 storey tower which would accommodate 420 residential units.  Mr Ladewig considered it had a superior shape and location and superior surrounding amenities.  It was not a riverfront property, but it did have river views.  Ms Wang thought that it was comparable in terms of flood risk and easement impact, but superior in terms of location, zoning and maximum building height so as to be superior overall.
  1. [20]
    Sale 3 was certainly of a similar area to the subject site, and had sold in August 2014, close enough in time to the valuation date (October 2015).  There had been meetings with the Council in October 2014 and January 2015 (pre-valuation date) which had given in‑principle support for an impact assessable application for residential development. 
  1. [21]
    The major dissimilarities between this site and the subject were its location, zoning and amenity. The subject land was located in an affluent area. It had river views, and indeed river frontage. It was zoned so as to allow high density residential unit development. Having regard to its location, that development would be at the upper end of that market. The Yeronga site was zoned Community Facilities (Community Purpose), with the qualification that in-principle support had been given for impact assessable residential use. It was located on a site which had been used by the RSPCA, and before that had been a rubbish dump. It had no river views or any other equivalent amenity. It was located in a suburb where the residential blocks were not of a comparable value to those located in Tennyson.
  1. [22]
    Mr Ladewig had regard to information after the valuation date as to approval in September 2016 for five residential buildings with 192 units. While the number of units is similar to the number of units in the subject property, my view is that the rule in Spencer’s[8] case prevents Mr Ladewig having had regard to that information.
  1. [23]
    The site had been used as a rubbish dump and was listed on the Department of Environment and Heritage Protection’s Environmental Management Register. Remediation was a necessary cost of any development. Mr Ladewig assumed this cost at $600,000 for the purpose of making his adjustment. This is what he had been told the purchaser of the site in August 2014 had assumed. He also made adjustments on the basis of additional flooding costs and the mooted requirement that the developer build a community hall and dedicate 20 per cent of the land as parkland. I think the latter two requirements come from the development approval actually given that is post-valuation information which ought not to have been used by Mr Ladewig.
  1. [24]
    There are certainly very significant differences between this land and the subject land. I do not think it is necessary to decide whether or not the Valuer-General is correct in its submission that Sale 3 was not truly comparable and should not have been used in Mr Ladewig’s valuation exercise.  That is, I do not think ground of appeal 2(c) should succeed as an independent point.

Ms Wang’s Evidence

  1. [25]
    The Body Corporate made criticisms of Ms Wang’s comparative sales and pointed to the fact that, like Mr Ladewig, she did not expose her reasoning sufficiently, either in her written statements or in evidence. I think these criticisms of Ms Wang’s evidence are valid. In fact it was conceded at the hearing of the appeal that of the six sales she put before the Court, only three – Sale 2 (in common with Mr Ladewig) and Sales 4 and 5 were truly comparable enough to be used in the valuation of the subject land. 
  1. [26]
    Sales 4 and 5 were not closely comparable.  They were both very much smaller blocks of land.  Sale 4 was an area of 7,630m2 located at West End and zoned high density residential – up to eight storeys.  Sale 5 was even smaller, 6,381m2, and also located in West End.  It had the same zoning.  Ms Wang thought Sale 4 was of inferior land and Sale 5 was of superior land.  While the Valuer-General was prepared to accept that these were comparable sales, both were small blocks in an inner city suburb, in contrast with the subject land, which was much larger and located well out of the city in an area likely to be attractive to families.  Certainly the markets for the units on each of these properties is different from the market for the units on the subject land.  Sales 4 and 5 yielded comparative rates of $1,395 and $2,922 respectively.[9]  These two rates are fairly close to Mr Ladewig’s Sale 1 and to the sale which was common between the valuers, Sale 2 (respectively).
  1. [27]
    From her comparative sales Ms Wang adopted an unadjusted rate of $1,615. Member Isdale comments, “Unfortunately, it was not explained with any particularity how this figure was arrived at, so the Court has no basis upon which to be satisfied that it was properly arrived at.”[10]  The Member goes on to explain that after making adjustments Ms Wang thought the appropriate rate yielded was $1,050m2.  He explains that Ms Wang’s reasoning in relation to that reduction is made apparent in the joint expert report and comments, “This explains the reduction to the adopted rate of $1,050 but the weakness remains that it is not explained how the $1,615 point was reached from the figures derived from the sales, …”.[11]
  1. [28]
    Ms Wang’s methodology was to value the third lot of the subject land, which is currently used as a gymnasium, separately to the other two lots. That lot was, in her opinion, suitable for low to moderate density residential use. Again the Member below correctly noted and criticised Ms Wang’s evidence on the basis that she did not give any reasons for the dollar-per-square-metre rate she deduced from the sales she said were comparable to this smaller lot of land – [98] of the reasons below.

Reasoning Below

  1. [29]
    The Member below was aware of the difficulties with the evidence before him.[12]  He makes comments about Ms Wang’s evidence not revealing her reasoning (above).  He discusses that there are difficulties with Mr Ladewig’s evidence – [101]-[106] of the judgment below, but does not apparently recognise that Mr Ladewig’s valuation suffers from the difficulties which I outline at [11] and [13] above.  In particular, at [109] the Member comments that “Ms Wang did not explain why she proceeded as she did, so it is not possible to prefer her method, which might have been possible if the reasons for using it had been explained”.  The Member does not seem to recognise that this criticism applies equally to Mr Ladewig.  The difficulty is that Member Isdale seems to disregard Ms Wang’s evidence, inferentially on the basis of this criticism, but acts upon Mr Ladewig’s evidence – [100]-[114] below.
  1. [30]
    This discrepancy in the treatment of Ms Wang’s evidence on the one hand, and Mr Ladewig’s evidence on the other was the subject of grounds 3 and 4 of the appeal to this Court.  In my view, the learned Member has either misunderstood the evidence and failed to recognise that the criticisms of Ms Wang’s evidence apply equally to Mr Ladewig’s, or he has rejected Ms Wang’s evidence for a reason which is not explicit in the judgment.  My view then is that these grounds of appeal should succeed.
  1. [31]
    I turn back to the first ground of appeal. I do think that paragraphs [100]-[114] below show that the Member misapplied the onus of proof. I think they also demonstrate that the learned Member has misunderstood s 170(b) of the LVA. These paragraphs read:
  1. “[100]
    The [Valuer-General] does not have to justify the valuation, it is for the [Body Corporate] to prove that [the] valuation for which it contends is correct.  …  once the [Valuer-General] introduces evidence, it is legitimate to consider it together with the [Body Corporate’s] evidence to see whether or not it has some weight in the [Body Corporate’s] case.  Additionally, section 170(b) of the [LVA] instructs the Court to ‘correctly make the valuation’ so it must endeavour to do so within the constraints of the evidence before it.
  2. [101]
    It has become apparent while considering the sales used in the joint report … that the sales relied upon by the [Valuer-General] do not support the value claimed to be deduced from the sales.  It has also become apparent that the sales relied upon by Mr Ladewig present some difficulties.

…

  1. [111]
    The Court is satisfied that the range contended for by Mr Ladewig is within the range of possible values of the land, that is to say, between the values shown by the rates per m2 of the land in sales 1 and 3. The land is clearly significantly superior to that in sale 3 and somewhat inferior to that in sale 1.
  2. [112]
    It is open to Mr Ladewig to hold the opinion that it is valued in the range of $775 to $825 per m2 and therefore to have a site value of $14,500,000. …
  3. [113]
    The evidence called by the [Valuer-General] does not support a finding that the Court should reject the [Body Corporate’s] evidence.  Additionally, it does not establish a satisfactory basis upon which the [Valuer-General’s] value of $18,500,000 could be accepted as correct.
  4. [114]
    On the whole of the evidence, the Court finds that the appeal must be allowed and the valuation as at 1 October 2015 must be reduced to $14,500,000.”
  1. [32]
    Section 169(3) of the LVA meant that the Body Corporate bore the persuasive onus on all the evidence before the Court. If the Body Corporate did not satisfy that onus, its appeal should have been dismissed. Section 170(b) of the LVA did not change that position. It did not mean that the Member was compelled to make a valuation in circumstances where the appellant before him had not satisfied its onus of proof.

The first sentence in paragraph [100] below is a correct statement of the position, and it is also true to recognise that the persuasive onus must be discharged on all the evidence before the Court.  However, the final part of what is said in [100] below,

  1. [33]
    and what is said at [113] below, do indicate that the Member below misunderstood questions about the onus of proof in this case.
  1. [34]
    The reasons at [111] and [112] below show that this was not a mere matter of words, but a mistake in substance. The range generated by Sales 1 and 3 was a range which included the Valuer-General’s October 2015 valuation, as well as the valuation contended for by Mr Ladewig. If the Court was satisfied that was the true range, the Body Corporate had not discharged its onus of proof. I cannot see that that position is changed by a finding that it was “open to Mr Ladewig to hold the opinion” that he did. The very next paragraph, [113], really looks to me to reverse the onus of proof. In my opinion, grounds 1 and 2(h) of the appeal ought succeed.

Rehearing

  1. [35]
    The errors identified at paragraphs [30] and [34] above are errors which oblige this Court to set aside the decision below and rehear the matter on the evidence before the Court below – s 172 LVA.
  1. [36]
    Assuming for reasons discussed at [25] and [28] above that the Valuer-General’s evidence did not advance its case in the Court below, the Court below was left with the evidence of Mr Ladewig.  None of his sales could be said to be closely comparable.  His range of $775m2 to $825m2 was unexplained.  I am not prepared to act on his valuation in circumstances where: 1) I cannot see how it was derived, and 2) his comparative sales produce a very wide range of rates. 
  1. [37]
    In my view, the evidence does not demonstrate that the Valuer-General’s valuation as at October 2015 was incorrect. The Body Corporate has not discharged its onus of proof. The Land Court ought to have dismissed the appeal before it.
  1. [38]
    I propose orders that:
  1. The appeal is allowed;
  1. The decision of the Land Court is set aside;
  1. The appeal by the Body Corporate for Tennyson Reach in LVA1175-16 is dismissed.
  1. [39]
    I would direct that the Valuer-General provide the Court with written submissions as to the costs of this appeal and the hearing below by 22 October 2018; that the Body Corporate have until 5 November 2018 to respond in writing and that the Valuer-General make any reply by 12 November 2018.
  1. [40]
    MEMBER SMITH: I have had the benefit of reading Dalton J’s reasons in draft. I agree with Justice Dalton, for the reasons stated by her Honour, that grounds of appeal 2(a) and (b) should not succeed.

Onus of proof

  1. [41]
    The first ground of appeal of the Valuer-General is that the learned Member misconstrued, or failed to properly apply, ss 169(3) and 170(b) of the LVA in determining the appeal. Section 169(3) of the LVA provides that the Body Corporate has the onus of proof for each of the grounds of appeal set in out in its notice of appeal.
  1. [42]
    By s 170 of the LVA, the Land Court on hearing a valuation appeal may make an order either confirming the valuation appealed against or reducing or increasing the valuation to the amount it considers necessary to correctly make the valuation.
  1. [43]
    Mr O'Brien QC brought this Court’s attention to an earlier decision of this Court in BT Dillion v Valuer-General.[13]
  1. [44]
    The Land Appeal Court was constituted by Demack J and Members Smith and Carter. Justice Demack delivered the reasons for judgment on behalf of the Court. Importantly, for present considerations, Demack J had this to say:

“The Legislature has not given this Court any investigatory powers under the Valuation of Land Act. If the Appellant’s case is not strong enough in its own right to establish the values contended for or to disprove he Valuer-General’s values, the Court is not empowered of its own volition to probe the fairness or correctness of the Valuer-General’s values and by this means arrive at its own estimate of value.”[14]

  1. [45]
    The Valuer-General uses the above extract from BT Dillion to support its contention in ground of appeal 1, going on to contend that his Honour below misapplied the onus of proof established by s 169(3) of the LVA and, in effect, inverted the operation of that section in the manner in which he evaluated the Valuer-General’s evidence.
  1. [46]
    To begin with, it is necessary to understand that the decision in BT Dillion was made under the now repealed Valuation of Land Act 1944 (VLA). At the time that BT Dillion was decided, s 13(7) of the VLA provided that valuations made by the Valuer-General were deemed correct until otherwise proven upon objection or appeal. The concept enunciated by s 13(7) of the VLA, as amended from time to time, was often referred to as the presumption of correctness of the valuation. The presumption of correctness of a valuation did not flow through to the LVA. As was pointed out by the Land Court in Meiers v Valuer-General,[15] the presumption of correctness was essentially replaced by the concept of the balance of probabilities. I consider the test that applied when BT Dillion was decided to be to a higher standard than that required for the onus of proof under the LVA. Notwithstanding that, I do consider that the general test set out by Demack J in BT Dillion is able to be applied in determining whether or not, on the balance of probabilities, an appellant under the LVA has discharged the onus of proof.
  1. [47]
    I agree with Justice Dalton’s view that, in determining if the Body Corporate was able to discharge the onus of proof, it is necessary to look at the comparative sales relied on by the valuers. I agree with the observations made by Dalton J as regards those sales.
  1. [48]
    The critical question to be asked is, did his Honour below properly apply the statutory provisions regarding the onus of proof? I agree in part with Justice Dalton’s analysis of the reasoning of his Honour in this regard. His Honour correctly relied upon all of the sales evidence before him, and not just the sales of the Body Corporate, to make his assessment. This approach is consistent with BT Dillion. However, at Reasons for Judgment (RJ) [101] his Honour went on to state that “the sales relied upon by the [Valuer-General] do not support the value claimed to be deduced from the sales”. Further, his Honour at RJ [113] stated that “[t]he evidence called by the respondent does not support a finding that the Court should reject the [Body Corporate's] evidence. Additionally, it does not establish a satisfactory basis upon which the [Valuer­General’s] value of $18,500,000 could be accepted as correct”.
  1. [49]
    The analysis as to whether or not the evidence of the respondent supports the valuation of the subject land is not the point. Indeed, the Valuer-General could choose to call no evidence on a valuation appeal; the situation would remain the same. It is a matter for an appellant, in this case the Body Corporate, to establish that the necessary threshold of evidence has been reached to discharge the onus of proof on the balance of probabilities.
  1. [50]
    It is clear from the reasoning set out by his Honour in the first part of RJ [100] that his Honour below started with the correct contention that it is a matter for the Body Corporate to prove that the valuation for which it contends is correct. However, his Honour has fallen into error by making reference to s 170(b) of the LVA. As I understand the operation of the LVA, the Court has a duty to undertake a two-step process in considering an appeal. The first step is to determine whether or not the evidence in its totality supports the case put by an appellant that the issued valuation is in error, on the balance of probabilities, so that the onus of proof is discharged. If the onus of proof is discharged, the second phase of the evaluation to be undertaken by the Court comes into play. That is, what is the correct valuation of the subject land? The Court can only get to a consideration as to the correct valuation of the subject land and thus, s 170(b) of the LVA, in circumstances where the onus of proof has been discharged.
  1. [51]
    Has the Body Corporate discharged the onus of proof in this matter? An examination of RJ [111] is critical in this regard. His Honour below had this to say:

“The Court is satisfied that the range contended for by Mr Ladewig is within the range of possible values of the land, that is to say, between the values shown by the rates per Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925 [2018] QLAC 7 of the land in sales 1 and 3. The land is clearly significantly superior to that in sale 3 and somewhat inferior to that in sale 1.”

  1. [52]
    It is necessary to unpack RJ [111]. The “range of possible values” that his Honour below was referring to was $1,300/Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925 [2018] QLAC 7 for sale 1 and $237/Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925 [2018] QLAC 7 for sale 3. It is, however, not correct to say that his Honour specifically found that the valuation of the subject could be either of those values. The reasoning of his Honour is gleaned by reference to the last sentence of RJ [111]. When those words are read in context with the rest of the paragraph, the only logical meaning for what his Honour was trying to say, albeit perhaps  inelegantly, is that  the  value  of the  subject  land  is significantly  above $237/Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925 [2018] QLAC 7 and somewhat below $1,300/Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925 [2018] QLAC 7. I am not satisfied that a finding of such a range necessarily falls within the valuation applied to the subject land by the Valuer-General.
  1. [53]
    There is certainly, in my mind, an inference that his Honour below considered that the appellant had discharged the onus of proof by his reasoning at RJ [114] that, on the whole of the evidence, the appeal must be allowed and the valuation must be reduced to $14,500,000. The Land Appeal Court, however, should not speculate as regards such matters.
  1. [54]
    The learned Member below was clearly let down by the state of the valuation evidence presented by both Mr Ladewig and Ms Wang. The poor state of the valuation evidence has perhaps contributed to his Honour misdirecting himself as to the manner in which the appeal should be disposed.
  1. [55]
    On the totality of the evidence before me, it appears to me that the Body Corporate has met the required onus of proof and that, having so met the onus, it is a matter for the Court to then go on and determine the correct valuation. Unfortunately, my view does involve an element of conjecture.
  1. [56]
    I do not want to read into his Honour’s reasons below words that are not there. Likewise, I do not want to dismiss clear findings that his Honour has correctly pronounced. As the Court of Appeal recently said in the case of Albion Mill FCP Pty Ltd & Anor v FKP Commercial Developments Pty Ltd:

“…Credit findings,  even  of  experts, ought  not  be  the  subject  of  appellate interference  unless  the judge’s  findings  of fact are shown  to  be  wrong  by incontrovertible facts or uncontested testimony or are glaringly  improbable or contrary to compelling inferences”[16]  (citations omitted)

  1. [57]
    Taking the considerations of the Court of Appeal in Albion Mill into account, and, given the unsatisfactory nature of the evidence before me and my finding that his Honour did not properly apply the test for the onus of proof in s 169(3) of the LVA, I find that the appropriate course for this Court to adopt is to remit the matter back  to his Honour, to first correctly apply the provisions of s 169(3) of the LVA and only then, if he is satisfied that the Body Corporate has discharged the onus, to determine the correct valuation for the subject land.
  1. [58]
    The question arises, does the Land Appeal Court have power to remit this matter back to his Honour? I have already detailed the provisions of s 170 of the LVA. However, it must be noted that s 170 is not all encompassing as to the powers that may be exercised by this Court on a valuation appeal. For instance, the note to s 170 indicates that the Land Court Act 2000 (LCA) and the rules[17]under that Act apply for valuation appeals and further appeals to this Court.
  1. [59]
    Section 57 of the LCA provides certain things that this Court may do on an appeal including suspending the operation of the decision and remitting the matter, with or without directions, to the Court that made the decision to act according to law.
  1. [60]
    Taking into account the requirements of s 55 of the LCA, I consider it appropriate that this matter should be remitted back to his Honour to properly apply s 169(3). It may be that his Honour, having had the benefit of hearing all of the evidence, will be satisfied that the onus has been met. Perhaps not. The interests of justice and the intent behind s 55(b) of the LCA warrant an order for a remit in this matter.
  1. [61]
    Before concluding my analysis, it is necessary to consider two observations that I believe are appropriate to make regarding the hearing and decision below. The first is the error which has occurred throughout the evidence of this matter, and found its way into the reasons for judgment, of using evidence of events subsequent in time to confirm a forethought relating to market value.

Evidence of confirmation of forethought

  1. [62]
    An analysis of the evidence in this matter and his Honour’s reasons for judgment show number of examples of evidence seeking to confirm a forethought in a market value sense. For instance, in RJ [47] his Honour stated that it “must be borne in mind that planning risk still exists as the approved development has been before the Planning and Environment Court but is still the subject of an appeal to the Court of Appeal”. Another example is found in Exhibit 10[18] which includes an email from a Mr Vaughan to Mr Ladewig regarding sale 3 which includes statements such as “you should note our original DA had 240+ units and we have ended up with 172 units and we got a lot of push back on height in a DA that went for almost 2 years”. Mr Vaughan also stated that “the project is now somewhat less attractive than the vision when we originally purchased…we would not pay as much with the benefit of hindsight given the final DA”.
  1. [63]
    I am concerned that the valuers relied upon evidence of events which occurred after the sale, rather than applying the proper test which was to consider the minds of the purchaser and vendor, objectively, as at the date of sale, taking into account the views that could reasonably be had on the knowledge in existence at that time to inform the price paid for the sale. The nature of the evidence that the valuers have given, and the way in which such evidence has been taken into account by his Honour below, offends the principle clearly stated in Brisbane City Council v Mio Art Pty Ltd & Anor[19] against the concept of any confirmation of a forethought. I can do no better than repeat what the Court of Appeal said in this regard in Mio Art:
  1. “[78]
    Mio submitted that Kurilpa 2 could be taken into account in assessing market value under s 20 ―not to prove a hindsight, but to confirm a foresight of the likely approval of a 12 storey development. The meaning of that catchy dictum is unclear. So is its logic. For direct proof of market value, it were an aphorism best forgotten. The lack of clarity is hardly surprising. The Spencer test postulates hypothetical parties in full possession of knowledge generally available on the date of acquisition. That knowledge includes knowledge of future possibilities, but only as possibilities, and with the weight which prudent persons would ascribe to them. It is difficult to imagine how the fact that a possibility subsequently became a reality could be directly relevant to that knowledge.
  2. [79]
    I see no inconsistency between this approach and that which enables subsequent sales to be taken into account in assessing market price. Those sales are not taken into account as matters which would be present in the minds of the hypothetical parties. They are simply evidence of an event from which an inference can be drawn about the position at an earlier (but not very much earlier) time. The implicit assumption is that nothing material has changed in the meantime or that if it has, allowance can be made for the change. Consequently they are probative of the earlier position. There will probably be other cases in which inferences about the position on the date of acquisition might logically be drawn from subsequent events. For example, suppose in circumstances similar to those in this case an acquiring authority denied that a change in building heights was under consideration at the date of acquisition. Publication of a document which would have taken six months to prepare on that topic only three months after the date of acquisition might tend to prove the falsity of the denial; it might support an inference that the topic was under consideration. But it would still be necessary to prove what would have been known by the hypothetical vendor and purchaser.
  3. [80]
    No such inference was relevant in the present case. The President held that a prudent purchaser would have been aware that Kurilpa 1 was under review, but not aware of the content of the review. The subsequent publication of Kurilpa 2 could not affect that finding.

Conclusion

  1. [81]
    The Land Court did not err in excluding Kurilpa 2 from consideration in assessing the market value of the land acquired by the Council.” (citations omitted)
  1. [64]
    The second observation relates to the valuation evidence.

The valuation evidence

  1. [65]
    I agree with the comments of his Honour below regarding the lack of confidence and reliability which can be had on Ms Wang’s sales. I also agree with the criticism made of Mr Ladewig, not just with respect to his sales, but also the manner in which he conducted himself at times during the hearing by being argumentative. That is not the appropriate approach for an expert witness to adopt. The role of the expert is to assist the Court with their expert opinion.
  1. [66]
    I agree that his Honour was correct not to exclude all of Mr Ladewig’s evidence despite the clear weakening of that evidence by Mr Ladewig himself.
  1. [67]
    What concerns me, however, is that there appears to have been no adjustment made by his Honour to Mr Ladewig’s range of $775/Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925 [2018] QLAC 7 to $825/Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925 [2018] QLAC 7 to reflect not only the weaknesses in the way he gave his evidence, but more importantly, the criticisms made to aspects of Mr Ladewig’s sales analysis.
  1. [68]
    Perhaps a proper adjustment of Mr Ladewig’s evidence would result in the onus of proof threshold not being met by the Body Corporate, or perhaps it would be so met. I would leave that to his Honour below to determine on remit.

Disposition

  1. [69]
    In all of the circumstances, it seems to me that this Court should:
  1. Allow the appeal;
  1. Set aside the orders below;
  1. Remit the matter back to his Honour below to make the decision according to law;
  1. Any application for costs, and supporting written submissions, for this appeal, are to be filed and served by 4pm 22 October 2018;
  1. Written submissions in response to any application for costs are to be filed and served by 4pm 5 November 2018; and
  1. Any written submissions in reply are to be filed and served by 4pm 12 November 2018.
  1. [70]
    MEMBER COCHRANE: I have had the benefit of reading the draft reasons of both her Honour Justice Dalton and his Honour Member Smith. I concur with the reasons of Member Smith and the orders proposed by his Honour.

Orders of the Court

  1. Allow the appeal;
  1. Set aside the orders below;
  1. Remit the matter back to his Honour below to make the decision according to law;
  1. Any application for costs, and supporting written submissions, for this appeal, are to be filed and served by 4pm 22 October 2018;
  1. Written submissions in response to any application for costs are to be filed and served by 4pm 5 November 2018; and
  1. Any written submissions in reply are to be filed and served by 4pm 12 November 2018.

DALTON J

LAND APPEAL COURT

PA SMITH

MEMBER OF THE LAND COURT

WL COCHRANE

MEMBER OF THE LAND COURT

Footnotes

[1]  Mr Ladewig used other measures of comparison.  The Member below rejected them.  There is no appeal from this decision.

[2]  [105] of the reasons below, and p 47 of the joint statement of evidence.

[3]  Page 52 of the valuer’s joint statement.

[4]Makita v Sprowles (2001) 52 NSWLR 705.

[5]  t 2-94 below.

[6]  cf Minister for Immigration and Border Protection v SZVFW & Ors [2018] HCA 30, [44], citing Norbis v Norbis (1986) 161 CLR 513 and House v The King (1936) 55 CLR 499, 504-505.

[7]  (1973) 32 LGRA 8, 23-24.

[8]Spencer v The Commonwealth (1907) 5 CLR 418.

[9]  [89] of the judgment below.

[10]  [92] of the judgment below.

[11]  [92] and [95] of the judgment below.

[12]  See the comment at [37] below, which is, in context, a criticism, and see the final sentence of [100] below.

[13]  (1987) 11 QLCR 231.

[14]  Ibid 233.

[15]  [2012] QLC 19 [27].

[16]  [2018] QCA 229 [112].

[17]Land Court Rules 2000.

[18]  Appeal Record Book Volume 4, page 681.

[19]  [2012] 2 Qd R 1.

Close

Editorial Notes

  • Published Case Name:

    Valuer-General v Body Corporate for ‘Tennyson Reach’ Community Titles Scheme 39925

  • Shortened Case Name:

    Valuer-General v Body Corporate for 'Tennyson Reach' Community Titles Scheme 39925

  • MNC:

    [2018] QLAC 7

  • Court:

    QLAC

  • Judge(s):

    Dalton J, Member Smith, Member Cochrane

  • Date:

    08 Oct 2018

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Albion Mill FCP Pty Ltd v FKP Commercial Developments Pty Ltd[2019] 2 Qd R 426; [2018] QCA 229
2 citations
Jump To
Cite 1 - [2018] QCA 229
Cite 2 - [2018] QCA 229
Brisbane City Council v Mio Art Pty Ltd[2012] 2 Qd R 1; [2011] QCA 234
2 citations
Jump To
Cite 1 - [2012] 2 Qd R 1
Cite 2 - [2012] 2 Qd R 1
BT Dillion v Valuer-General (1987) 11 QLCR 231
2 citations
Jump To
Cite 1 - (1987) 11 QLCR 231
Cite 2 - (1987) 11 QLCR 231
Crompton v Commissioner of Highways (1973) 32 LGRA 8
2 citations
Jump To
Cite 1 - (1973) 32 LGRA 8
Cite 2 - (1973) 32 LGRA 8
House v The King (1936) 55 CLR 499
2 citations
Jump To
Cite 1 - (1936) 55 CLR 499
Cite 2 - (1936) 55 CLR 499
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
2 citations
Jump To
Cite 1 - (2001) 52 NSWLR 705
Cite 2 - (2001) 52 NSWLR 705
Meiers v Valuer-General [2012] QLC 19
2 citations
Jump To
Cite 1 - [2012] QLC 19
Cite 2 - [2012] QLC 19
Minister for Immigration and Border Protection v SZVFW & Ors [2018] HCA 30
2 citations
Jump To
Cite 1 - [2018] HCA 30
Cite 2 - [2018] HCA 30
Norbis v Norbis (1986) 161 C.L.R., 513
2 citations
Jump To
Cite 1 - (1986) 161 C.L.R., 513
Cite 2 - (1986) 161 C.L.R., 513
Spencer v The Commonwealth (1907) 5 CLR 418
2 citations
Jump To
Cite 1 - (1907) 5 CLR 418
Cite 2 - (1907) 5 CLR 418

Cases Citing

Case NameFull CitationFrequency
BPI No 1 Pty Ltd v Valuer-General; BWP Management Ltd v Valuer-General [2021] QLC 23 citations
BWP Management Limited v Valuer-General [2019] QLAC 42 citations
Eumundi Group Hotels Pty Ltd v Valuer-General [2020] QLC 372 citations
Eumundi Group Hotels Pty Ltd v Valuer-General [2021] QLAC 22 citations
F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 254 citations
ISPT Pty Ltd v Valuer-General (No 3) [2019] QLC 404 citations
Jensen v Valuer-General [2024] QLAC 32 citations
Kennards Self Storage Pty Ltd v Valuer-General [2023] QLC 31 citation
Lake Maroona Pty Ltd v Valuer-General [2019] QLC 235 citations
McPaul v Valuer-General [2021] QLC 73 citations
Sentinel Homemaker 2 Pty Ltd v Valuer-General [2018] QLC 474 citations
Stewart v Department of Resources [2025] QLC 102 citations
The Trust Company Limited v Valuer-General [2020] QLC 392 citations
The Trust Company Limited v Valuer-General; El Camino Priority I Pty Ltd v Valuer-General; Body Corporate for "Admiralty Quays" CTS 24592 v Valuer-General [2020] QLC 382 citations
Tseng v Valuer-General [2018] QLC 423 citations
YFG Shopping Centres Pty Ltd v Valuer-General [2020] QLC 102 citations
1

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