Mau v Valuer-General[2016] QLC 58

LAND COURT OF QUEENSLAND

Background

1. [1]
   This decision relates to an appeal by Jit Jew Mau and Lily Geok Eng Goh (the appellants) against a valuation by the respondent, the Valuer-General, pursuant to the Land Valuation Act 2010 (“LVA”), which valued the appellants’ property situated at 10 Kolan Street, Runcorn (the subject land), in the sum of $370,000.00 as at 1 October 2014.  The appellants contend for a valuation of $322,000.00.

2. [2]
   The subject land has received a site valuation pursuant to the provisions of the LVA, which separates land valued as site value land and land valued as unimproved land.

The Subject Land

3. [3]
   The subject land is described as Lot 85 on RP 188334, County of Stanley, Parish of Yeerongpilly. It is a residential block.

4. [4]
   Telephone, electricity, water, sewerage, mail and refuse collection services are available to the subject land.

5. [5]
   The subject land has an area of 555m².  It has a regular shape.  There is a gentle slope up from the street to the eastern boundary of the property.

6. [6]
   The subject land has been cleared and developed for residential purposes with a single dwelling.

The Hearing

7. [7]
   The appellant, Mr Mau, represented himself and his wife and gave evidence at the hearing. He has no legal or valuation qualifications. The respondent was represented by Mr Prasad and relied on the evidence of a registered valuer, Mr Wall.

8. [8]
   An inspection of the subject land and various sale properties, in the presence of both parties, was undertaken and the hearing was held at Brisbane on 28 and 29 January 2016.

The Valuation Process

9. [9]
   It is the responsibility of the respondent to undertake a valuation of not only the subject property, but all properties throughout Queensland. Those valuations are the basis for rating and land tax and related purposes.

10. [10]
    I note with approval what his Honour Isdale said in Steers v Valuer-General:^[1]

[8] The use of sales to provide comparisons of value is well established. In NR and PG Tow v Valuer-General (1978) 5 QLCR 378, the Land Appeal Court constituted by Stable SPJ, Mr Smith and Mr Carter said at page 381:

“Courts of the highest authority have laid down that the best test of value is to be found in the sales of comparable properties, preferably unimproved, on the open market round about the relevant date of valuation and between prudent and willing, but not over-anxious parties.”

[9] This Court is required to follow the decisions of the Land Appeal Court and accordingly must prefer the evidence of comparable sales to the method contended for by the appellant, simply increasing a previous value by a factor of 10. Mr Steers did not explain why this particular multiplier and not some other one should be applied.

11. [11]
    Market value is also a relevant feature to consider under the LVA. As then President Trickett said in Fairfax v Department of Natural Resources and Mines:^[2]

[11]  The principles for determination of the ‘market value’ of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of a property. (See Griffith CJ at 432 and Isaacs J at 441).

[12] It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land in Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that:

“Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but-as with other commodities-the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date-and that is evidenced by sales.”

12. [12]
    In essence, the Spencer test^[3] has been codified in s 18 of the LVA, which provides as follows:

18 What is a bona fide sale

3. (1)
   A bona fide sale, for land, is its sale on reasonable terms and conditions that a bona fide seller and buyer would require assuming the following (the bona fide sale tests)—

1. (a)
   a willing, but not anxious, buyer and seller;

2. (b)
   a reasonable period within which to negotiate the sale;

3. (c)
   that the property was reasonably exposed to the market.

3. (2)
   For subsection (1), in considering whether terms and conditions are reasonable, regard must be had to—

1. (a)
   the land’s location and nature; and

2. (b)
   the state of the market for land of the same type.

3. (3)
   To remove any doubt, it is declared that if—

1. (a)
   there is a sale of the land in question; and

2. (b)
   the bona fide sale tests are complied with;

the sale is a bona fide sale.

3. (4)
   In this section—

land in question means land whose value is being decided.

13. [13]
    Importantly, the LVA casts the following duty on the appellants at the hearing in s 169(3):

However, the appellant has the onus of proof for each of the grounds of appeal.

14. [14]
    It should also be noted that appeals under the LVA are to be determined on what is essentially the balance of probabilities.^[4]

15. [15]
    As previously indicated, the subject land has received a site valuation under the LVA. Section 19 of the LVA relevantly provides as follows:

19 What is the site value of improved land

3. (1)
   If land is improved, its site value is its expected realisation under a bona fide sale assuming all non-site improvements for the land had not been made.

3. (2)
   However, the land’s site value is affected by any other relevant provisions of this chapter.

16. [16]
    The LVA then goes on in s 23 to reveal what site improvements are:

23 What are site improvements

3. (1)
   Site improvements, to land, means any of the following done to the land –

1. (a)
   clearing vegetation on the land;

2. (b)
   picking up and removing stones;

3. (c)
   improving soil fertility or soil structure;

4. (d)
   if the land was contaminated land as defined under the Environmental Protection Act 1994 – works to manage or remedy the contamination;

5. (e)
   restoring, rehabilitating or improving its surface by filling, grading or levelling, not being irrigation or conservation works;

6. (f)
   reclamation by draining or filling, including retaining walls and other works for the reclamation;

7. (g)
   underground drainage;

8. (h)
   any other works done to the land necessary to improve or prepare it for development.

3. (2)
   However, a thing done as mentioned in subsection (1) –

1. (a)
   is a site improvement only to the extent it increases the land’s value; and

2. (b)
   ceases to be a site improvement if the benefit was exhausted on the valuation day.

3. (3)
   Also, excavating the land for any of the following is not a site improvement –

1. (a)
   footings or foundations;

2. (b)
   underground building levels.

Example of an underground building level –

an underground car park

3. (4)
   In this section –

clearing vegetation on land –

1. (a)
   means removing, cutting down, ringbarking, pushing over, poisoning or destroying in any way, including by burning, flooding or draining; but

2. (b)
   does not include destroying standing vegetation by stock or lopping a tree.

The Appellant’s Evidence

17. [17]
    The appellant Mr Mau gave extensive oral and statement evidence to the Court.

18. [18]
    Exhibit 1 details the appellants’ grounds of appeal. It is a lengthy document. To give substance to the appellants’ case is set out below the key points of the Exhibit 1:

1. The valuation method is flawed resulting in many inconsistencies.

2. Valuation is unfair and not equitable to many land owners especially those having small blocks as compared to larger blocks, i.e. those that can be subdivided into smaller blocks.

3. Valuation was not based on all facts on the ground.

4. Valuation was not based on a set formula – more guess work and opinion of the officers.

5. I would like to suggest a more equitable forma based on facts and the point system…

6. Craig Heslehurst and Michael McGarry were unable to show me on paper how the $370,000 valuation for 10 Kolan St, Runcorn 4113 was arrived at.

7. When comparing land value, and for that matter anything, one needs to compare apple to apple.  So, in this case, it can be based on $ per sqm.

8. The four vacant land valuations supplied by Mr. Heslehurst for 2014 are wrong.  They have been undervalued.  See attachment 2 – page 10.

9. The 2015 percentage increase of 25% for 10 Kolan St, Runcorn 4113, is excessive.  Nothing has changed dramatically in this area.

10. Normally land value nearer to the city is always higher but not reflected in the Valuer-General’s valuations.  It is shown clearly in 39 Kenora St and 10 Kolan St…

11. If the Land Act is not fair, it is the duty of everyone to make it as fair as possible…

Comparing Property Values

1. …

2. (b)
   The owners of 310 sqm are paying BCC rates at $935 per sqm.  The two large blocks of 4047 and 4014 sqm are paying BCC rates at $232 and $222 per sqm respectively.  This is not equitable because the former is paying more money for a smaller block of land, whereas the latter is paying less money for a larger block of land.

3. (c)
   The percentage increase is out of proportion.  At this rate of increase in valuation, 70 Picot Crescent may even end up higher than the two larger blocks.

2. Compare 10 Kolan St to 39 Kenora St and others using my rough format based on the suggested point valuation (view: Attachment 3 Table Proposed Valuation Format Subject to Fine-Tuning).

Valuer-General’s Valuation

My Format Evaluations (See Attachment 3)

The reasons on valuation difference are obvious and in the case of 39 Kenora St, it is also reflected in the sale price…

BCC Council Rates

BCC council rates and charges are in favour of larger housing blocks because of flawed valuation by your department for 47 Mildura St., Stretton 4116 (4047 sqm).

…

Hypothetically, if subdivision was allowed, this property of 4047 sqm has the potential to be divided into 8 lots of land at about 500sqm.  The property owner is paying very little money to BCC for occupying 8 lots of land.

Another major flaw in the valuer-general’s valuation for large blocks which BCC Council has in some cases approved for sub-division.

…

34 Ballarat St is only 10 km from the city, valued at $315, 000 and 10 Kolan St is 16 km from the city, valued at $370,000.  How do you account for the difference?

I accept, we are not perfect, so a variation of 5 to 10% difference in our calculation is acceptable, but not 17% in this case.

19. [19]
    Thankfully, the appellants were able to summarise their position somewhat in their written submissions. Relevantly, they had this to say:

10 Kolan St, Runcorn valuation of $ 370, 000 is not correct because of the widespread glaring evidence of flawed, incompetent, unprofessional and inconsistency of the valuation.

Mr. Prasad’s valuation report filed on 15-1-2016 at The Land Court, all 22 pages lack substance (only pages 9 to 12 are of some value)

1. 145 Nursery Av. Runcorn (P9)
   2. a)
      Allowance of $ 2000 for existing fencing …. (Trivial and insignificant sum)
   3. b)
      Significant trees… no allowance added (Trivial and no substance comments)
   4. c)
      Significant through traffic (During site visit hardly any traffic see – EXAGGERATION and not truthful)
   5. d)
      Deceased estate… local purchaser (no substance)
   6. e)
      Considered inferior… overall inferior location… (Support your comments, tell us why?  No substance.  You don’t need an expert to write unsubstantiated statement)

2. Mr. Craig Heslehurst the valuer who came to my house provided us a list of 4 vacant land sale/valuation for comparison (pg 14)

All these properties are in Runcorn and they have more similarities in most aspect to 10 Kolan St.

Example:

location,

age of suburb,

type of occupants,

wealth of occupants.

3. Why did Mr. Wall choose
   2. a)
      53 Crane Cres., Runcorn

This is a new estate/development

New house

Bigger houses

Fresh look and feel good

Good surrounding.

Buyers are prepared to pay more for the land.

Valuation $310, 000 = $ 745 per sqm

Mr. Wall, the expert has deliberately chosen this property for its higher valuation of $ 745 per sqm.

4. Why didn’t Mr. Wall, the expert use 73 Gumtree, Runcorn (one of the 4 properties provided by Mr. Craig to us for comparison

Take note that Mr. Craig Heslehurst had also used 73 Gumtree St., Runcorn during our preliminary conference held at the Land Court on 14/10/2015.

73 Gumtree -$ 360, 000 = $ 618 per sqm.

This property is just around the corner in the same area as 53 Crane Cres.

Mr. Wall, the expert is cherry picking and selecting the properties that suits him.  Mr. Wall, the expert is unprofessional.  His expert report, cannot be relied on.

It is a BIAS report

It is unethical

It is unprofessional

It is not credible

5. 5 Haseler Cres., Sunnybank Hills

To make matters worse, Mr. Wall, the expert has chosen another suburb when Mr. Wall should have used the list provided by Mr. Craig Heslehurst, who is one of their valuers.

5 Haseler Cres has little similarity to 10 Kolan St.

Example:

2. a)
   Much more affluent suburb
3. b)
   New estate/development
4. c)
   Location nearer to Sunnybank Shopping town
5. d)
   Type of occupants
6. e)
   Wealth of occupants.

Once again, Mr. Wall’s expert report cannot be relied on.

It is a BIAS report

It is an unprofessional report

It is an unethical report

It is a cherry picking report

6. My 22 pages submission on 18-1-2016 (Exhibit 2)

Mr. Prasad and Mr. Wall have only countered the valuations of 10 Kolan St. Runcorn.

They chose to ignore all my 22 pages of allegations and explanations sought.

They have been given ample time (18-1-2016 to 28-1-2016) to put their facts and figures in writing to the Court.

Mr. Prasad and Mr. Wall the expert know very well of the following –

2. a)
   That they have no answer to my 22 pages of allegations
3. b)
   That it would expose their incompetency
4. c)
   That it would expose their credibility
5. d)
   That it would expose their dodgy valuation
6. e)
   That they would be in tatters

I have made 11 Grounds of Appeal and 22 pages of grievances.

Mr. Prasad and Mr. Wall, the expert have chosen to remain silent.  It only goes to show they accept what I have written are facts and they have no way to dispute them.

Under these circumstances, the valuation of 10 Kolan Street of $ 370, 000 is not acceptable when compared with any incorrect and low valuations of other properties.

20. [20]
    The essence of the appellants’ case can be distilled down to four key points^[5] as follows:

a.  The Appellant has relied on the relativity or comparison of valuations for a number of properties, some of which are in different locations, size and use to that of the subject;

b.  The Appellant has calculated and relied on the pro-rata (rate per square metre) for various properties and compared that to the subject;

c.  The Appellant contends that the percentage increase in the valuation from the previous year of the subject is not justified and not consistent with the percentage increase for various other properties;

d.  The Appellant has formulated an unprecedented valuation methodology that applies a point system to achieve the valuation of the subject at $322,000;…

Points a., b., and c. above are self-explanatory.  However, more does need to be said about point d., the appellants’ point system of valuation.

21. [21]
    The appellants set out their contention for a points system on page 11 of their grounds of appeal. I have included the appellants’ application of the points system to their case in my earlier quotes from their grounds of appeal. In the appellants’ view, the use of a points system will allow for less margin of error than the current system of valuation adopted by the respondent. The appellants contend that the points system can be fine-tuned by a “nonbiased committee consisting of a judge (chairman), and academic people/real estate agents”.^[6] 

22. [22]
    The appellants’ arguments in support of a points system of valuation are quite novel, and could easily be dismissed out of hand. However, it is my view that, lying below the surface of the appellants’ points system, is a methodology not that far removed from the considerations that a valuer should properly take into account when valuing a property. A difficulty, of course, for the appellants is that, by their own admission, their points system is not precise. That is exactly the point. Valuation is not a precise, mathematical science. I will deal with this issue further in my findings on this appeal.

The Respondent’s Evidence

23. [23]
    The respondent relied on the evidence of an experienced registered valuer, Mr Wall.  Unfortunately, Mr Wall was not the original valuer responsible for determining the valuation initially.^[7]  Clearly, in my view, this caused the appellants difficulties in formulating their appeal.

24. [24]
    The appellants prepared their case firstly as set out in their grounds of appeal using sales they considered appropriate and then, in preparing their case for hearing, on the bases of sales evidence provided to them by another valuer for the respondent at the preliminary conference.

25. [25]
    There is no doubt that what occurs at the preliminary conference is confidential and I have no intention to go behind that veil of confidentiality. However, the respondent in effect conceded that another valuer prepared the matter for hearing, and I accept that the first that the appellants knew of the case ultimately put by the respondent was when Mr Wall’s first report was received shortly before the hearing.

26. [26]
    I raise this as an issue of concern. I appreciate that the circumstances are unusual; not so much the change of valuer by the respondent, but the complete change of sales that the respondent relied on. Perhaps in cases where these circumstances repeat in the future, it may be appropriate to send the parties back to a further preliminary conference. I accept though that, in the particular circumstances of this matter where the appellants rely on their points system, a further preliminary conference would have been highly unlikely to have led to a resolution of this matter.

27. [27]
    Turning now in more detail to the respondent’s evidence, Mr Wall relied upon the direct comparison valuation approach, where sales for a comparable use are analysed and directly compared to a property to determine its value. Quite properly, Mr Wall relied on sales of vacant land.

28. [28]
    Mr Wall relied on three sales for his direct comparison valuation. Helpfully, he provided a summary of his sales as follows:^[8]

29. [29]
    In summary, Mr Wall had this to say regarding the comparison between his three sales and the subject property:^[9]

…Sale 1 was part of a deceased estate and was sold at auction by a local agent to a local purchaser.  Overall it is considered inferior to the subject property due mostly to the inferior location.

Sale 2 is located in a newly developed residential pocket.  While it is positioned in a newer estate the smaller area and narrow street frontage make the sale overall inferior to the subject property.  The sale does not enjoy the elevation of the subject.

Sale 3 is considered overall superior to the subject and provides an upper level when establishing the valuation on the subject property.

Overall the subject property is a well located, somewhat elevated, residential property in a desirable residential location.  I consider the site valuation of $370,000 appropriate for the subject land and it is well supported by market evidence.

30. [30]
    To further assist the Court, Mr Wall provided a written report^[10] in reply to the appellants’ statement of evidence.  Mr Wall’s oral evidence was consistent with his reports.

Respondent’s Submissions and the Court’s Analysis Thereof

31. [31]
    The respondent provided detailed written submissions in support of the respondent’s contention that the appellants’ appeal should be dismissed. The respondent’s submissions included parts dealing with the statutory provisions of the LVA, the role of the Land Court, and valuation methodology and principles. I am in general agreement with the respondent’s contentions with respect to those headings, which are similar to the various principles that I have set out earlier in these reasons.

32. [32]
    The respondent next turned to the issue of relativity principles. The respondent conceded that it is appropriate that the site valuation of any parcel should bear a proper relativity with others, having regard to their similarities and differences in matters relevant to value.^[11]

33. [33]
    The respondent then went on to refer to a number of relevant authorities, including my decision in the case of Burnett v Department of Natural Resources and Water^[12]  In Burnett, I had this to say:

This is a difficulty often faced by appellants in VLA matters who rely on relativity as one of their grounds of appeal.  It is not enough for an appellant to simply demonstrate that the value of the appeal block is out of kilter with other, nearby blocks.  They need to go further to demonstrate that the values of those other blocks are correct, and that the value of the appeal block is incorrect.  This is because it is the primary function of the Court to determine the unimproved value of the land subject to appeal.  Changing an issued valuation simply because other valuations may be wrong would only tend to exacerbate the error.  Of course, this is a generalised statement, and each case must be determined on its own facts.

34. [34]
    Also relevant is the decision of then Member RP Scott in the case of Thomson v Department of Natural Resources and Mines^[13] where he had this to say:

[6]  Mr Quirk-Anderson explained in evidence how he had carried out a mass appraisal valuation of the lands within Port Douglas by investigating available sales evidence then ascertaining that an increase of 130% or a factor of 2.3 ought to apply to the statutory valuation of properties which applied in October 2002.  Mr Thomson expressed concern that there was no evidence before me to establish the correctness or otherwise of the 2002 valuations nor whether a factor of 2.3 was justified.  He also expressed concern that Mr Quirk-Anderson might have employed only three sales in valuing large areas of Port Douglas.  These matters are not of concern to me as it is not my task to consider whether the valuations in Port Douglas, generally, are appropriate but whether the appellant in this case has demonstrated to me that the Chief Executive's valuation of the subject land is wrong.  In that respect Mr Quirk-Anderson has relied on sales evidence and on an orthodox method of valuation. 

[7]  This issue has come up on more than one occasion in the past, one example being found in Gibson v Chief Executive, Department of Lands (V92-64 unreported Land Appeal Court 9 June 1995) at 6:

“We reiterate what has been said often before – and what is Mr Tighe's chief concern – the importance of correct relativity in the equitable distribution of the rating burden cannot be overstated.  However the question before this Court is the correct valuation of the subject land, not the correct valuation of an area.  It would not advance the appellant's case to satisfy us that her neighbour's land was undervalued: … The appellant must show that the valuation of her land was incorrect.”

[8]  A similar opinion is expressed by the Land Appeal Court in Bignell v Chief Executive, Department of Lands (AV92-65 unreported Land Appeal Court 4 March 1996) at 11:

“What has to be decided in this case is the proper value of the subject land by reference to sales evidence about comparable unimproved properties. … If a proper valuation of the subject land makes it inconsistent with the relative values of neighbouring blocks then so be it.  The question before this Court is 'the correct valuation of the subject land, not the correct valuation of the area.”

35. [35]
    The respondent next turns to the issue of pro-rata comparison, which is otherwise understood to be an issue raised by the appellants of valuing properties on a rate per square metre basis. I agree with the respondent that the appellants must fail on this point. As was made clear by the Land Appeal Court in the case of Grahn v Valuer-General:^[14]

In the appellants’ submission there is no reason why two blocks with the same position and outlook should be valued at such apparently disparate rates.  Blocks should be valued at the same rate per square metre.  Applying the rate calculated for 16 Whytecliffe Parade to 56 Whytecliffe Parade would give the latter block a value of approximately $80,500, substantially more than the $45,000 for which the appellants contend.

The appellants fail on this point because the appropriate basis for the valuation of a residential lot is not the application of a rate per square metre but an assessment of the unimproved value of each lot as land used for single unit residential purposes…

36. [36]
    I also examined the same issue in the case of Cowen v Department of Natural Resources and Water^[15] where I had this to say at paragraphs [26]-[30]:

[26]  One area of attack that Mr Cowen made on Mr McGarry’s sales and valuation evidence related to an allegation that both his property and other like properties had been valued, not on a site basis, but on a square metre basis. Of course, it is not appropriate to value a residential allotment on a rate per square metre. As the Land Appeal Court said in McDonald v The Valuer General:

“The appellants fail because the appropriate basis for the valuation of a residential lot is not the application of a rate per square metre but an assessment of the unimproved value of each lot as land used for single unit residential purposes. As the Land Appeal Court said in H and E Grahn v The Valuer-General, AV89-246 and 247, 13 December 1990 (not yet reported):

‘for the purpose of valuing residential sites, the preferable method of comparison is on a site to site basis and not on the basis of a unit area value comparison. Site for site comparison should take into comparison such matters as the size of the lots, the situation of and access to the lots, the shape and topography of the lots etc. and comparisons on a unit area basis do not necessarily reflect valuation considerations for the above features.’”

[27]  In support of his contention that the respondent had applied a square metre rate to the valuation of the subject and surrounding properties, Mr Cowen put the following to Mr McGarry during cross-examination:

“The difference in UCV between No.20 and No.26 is exactly proportionate to the area of the land?-No, I’m not saying that at all.

You disagree with that?-I’m not saying it’s in direct proportion. The blocks have been valued individually. They’re not valued on a per square metre basis if that’s what you’re getting to, no.

It certainly appears that way. If you take 26 you’ve got 1,032 square metres and you divide it by Derby Street’s metreage of 1,346, multiply it by Derby Street’s valuation of 1.3 you come out with, if you’re computer rounding, $1m. which is the UCV?-Purely coincidental.

Okay. What about the other one in your thing there, No.16? That’s vastly inferior as well to No.20?-It’s inferior, it’s not vastly inferior.

Is $100,000 UCV inferior, it’s not vast but it’s slightly inferior?-It’s a similar sized block, it’s slightly smaller, it’s got the same sort of frontage, it’s lower down the hill but it doesn’t receive the same breezes or the same types of views and it’s also of course beside the heavily overgrown gully that we’ve discussed before.

On a square metre basis compared to No.20 it comes out at $1.221m. which rounds down to $.2m (sic). which coincidentally is its UCV. That’s a coincidence again?-I would say so. These are valued on site areas, not a square metre basis.

In all the notes in the files they all show by a square metre basis. That’s in fact how Bob van Hees did the adjustment, well the adjustments were done on a per square metre. That actually shows in the FOI notes, by square metre. You don’t do it that way?-No I don’t and I don’t believe he did either. He may have noted it down as part of the calculations that he was doing but he hasn’t valued it that way I’m sure and I don’t value it that way.”

[28]  At first blush, the proposition put by Mr Cowen, that a square metre basis has been used to value relevant properties, appears compelling. However, that situation only arises when one undertakes the rather complex mathematical formula, together with a rounding exercise, as Mr Cowen put to Mr McGarry above. The situation is somewhat clearer if one undertakes a simple mathematical equation for each of the five properties listed for relativity purposes in Exhibit 20. Without doubt, the simplest way of ascertaining what the dollar rate per square metre would be for any particular lot of land is to divide the valuation of the land by the actual area of that land. When this exercise is undertaken, the following rates per square metre emerge for the respective properties as at 2006:

16 Derby Street - $948.61 per m²

20 Derby Street - $965.82 per m²

26 Derby Street - $968.99 per m²

45 Rosecliffe Street - $1154.83 per m²

49 Rosecliffe Street - $1025.39 per m²

[29]  Clearly, when the above actual rates per square metre for each relativity block are taken into account, the respondent has not valued those properties, in my view, using a rate per square metre. I accept Mr McGarry’s evidence in this regard.

[30]  Unfortunately, the above exercise shows the folly which can follow in an analysis of valuation methodology... (citations omitted)

37. [37]
    A further issue addressed by the respondent was the question of the impact of a valuation on local authority rates. The authorities make it clear that local authority rates is not a subject which this Court can take into account when determining the proper valuation for a parcel of land.

38. [38]
    As I said in Boysen v Department of Natural Resources, Mines and Water:^[16]

[11]  I have no doubt that the appellants, as pensioners, honestly believe everything they have put into evidence in this matter, and are genuinely concerned about increasing values impacting on them through higher rates.  However, it is not the role of this court to determine appeals such as this on any basis outside that of the VLA and decided precedents.  Specifically on the point of large increases in valuations and council rates increases, the Land Appeal Court had this to say in Tow v Valuer-General [1978 5 QLCR 378] at page 381:

“It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation.  The Valuer-General and the Court are concerned with finding unimproved value and not with the amount of rates that may be levied as a result.”

Conclusion

39. [39]
    As I have indicated above in the analysis of the respondent’s submissions, there is ample authority to show that the appellant’s have not, in my view, any compelling authority on which to base a decision in their favour. However, given the amount of time and effort that the appellants have clearly put into preparing their case and, in particular, their proposed points system as a method of valuation methodology, I consider it appropriate to provide some further commentary on the appellants’ case.

40. [40]
    The respondent, essentially, dismissed the points system out of hand. Whilst that may be an understandable approach, in my view the appellants, in detailing a large number of factors which they say should be taken into account for their points system, have, in fact, whether by accident or design, essentially set out the very factors of comparison which valuers should, and in most cases do, take into account when comparing subject and sales properties. Where the points system falls down is when the appellants seek to provide arbitrary scores, based on no evidence and no mathematical justification, to the points to be allocated to each category. Their approach is simply subjective and wrong. Although they do acknowledge that their points system could be refined by an independent evaluation, the principles of valuation are simply not apt to be determined by a random mathematical set of formula which it is claimed could apply equally across all properties in this very diverse state.

41. [41]
    In short, while I find nothing in valuation methodology or case law that can support the appellants’ points system, the various headings that they have set out in their points table encapsulate many of the same considerations that valuers take into account in valuing a property. It must always be remembered that a valuation case such as that put in evidence by the respondent in this matter is a matter of expert opinion evidence, not an application of scientific, mathematical formula.

42. [42]
    The appellants have failed to show error on the part of Mr Wall.

43. [43]
    In all the circumstances, the appellants have failed to establish on the balance of probabilities that the Valuer-General’s valuation is incorrect and accordingly the appeal must be dismissed.

Order

The appeal is dismissed.

PA SMITH

LAND COURT MEMEBER