Toomey v Valuer-General[2017] QLC 13

LAND COURT OF QUEENSLAND

1. [1]
   John Joseph Toomey owns two lots of land in the Brisbane suburb of Sherwood. The first lot is located at 521 Honour Avenue, Sherwood and is otherwise described as having a Property ID 9089886 and has a real property description of Lot 4 on RP 229830, Parish of Oxley. It has an area of 1297m².

2. [2]
   That land is on the corner of Prospect Street and Honour Avenue and is developed with Mr Toomey’s home on it.

3. [3]
   The other lot of land is located at 8 Prospect Street, Sherwood and is otherwise described as having a Property ID 9090839 and a real property description of Lot 3 on RP 229830, Parish of Oxley. The Prospect Street land has an area of 733m² and is developed with a residence on it.

4. [4]
   The two lots of land adjoin each other.

5. [5]
   For convenience in this decision I shall refer to them as the Prospect Street land and the Honour Avenue land to distinguish them. Each of the lots of land is classified as “Character Residential 1 (General) (CR1 Area)” in the Brisbane City Plan 2014 which was effective from 30 June 2014.

6. [6]
   Both lots also form part of the “Sherwood – Graceville District Neighbourhood Plan” which was effective from 15 April 2011 and each lot is also identified in the Dwelling House Character Overlay pursuant to the town planning scheme.

7. [7]
   Pursuant to his statutory obligations, on 1 October 2014 the Valuer-General issued an official valuation in respect of each of Mr Toomey’s lots of land. Those valuations were to take effect on 30 June 2015.

8. [8]
   In the valuation as at 1 October 2014 the Honour Avenue land was valued at $800,000 and the Prospect Street land was valued at $770,000.

9. [9]
   As was his entitlement pursuant to the Land Valuation Act 2010 (LVA) Mr Toomey appealed against each of those valuations.

10. [10]
    In respect of the Honour Avenue land Mr Toomey contended that it should have a valuation of $720,000 and in respect of the Prospect Street land he contended that valuation should be reduced to $690,000.

11. [11]
    By an order made on 11 November 2015 it was ordered that both of these appeals be heard together.^[1]

12. [12]
    Pursuant to s 169 of the LVA the appeal is by way of a rehearing and the appellant has the onus of proof for each of the grounds of appeal.

13. [13]
    As I hope I make clear in the observations below, at the hearing of the appeal Mr Toomey informed the court that his appeal was limited to one single issue – namely the impact of noise on his lots of land caused by the manner in which Queensland Rail conducted its operations on the railway line across the road from Mr Toomey’s properties.

14. [14]
    At the hearing of the appeals Mr Toomey appeared and represented himself and the respondent Valuer-General was represented by Mr Prasad, a legal officer on behalf of the Department of Natural Resources and Mines.

15. [15]
    Mr Toomey gave evidence on his own behalf but did not engage the services of a valuer.

16. [16]
    He also prepared a set of photographs which clarify aspects of his objections.^[2]

17. [17]
    The respondent relied upon a report prepared by a valuer, Mr Heslehurst. Mr Heslehurst’s reports were in respect of each of the lots of land and those reports became exhibits before the court.^[3].

18. [18]
    It is useful to set out in detail the contents of Mr Toomey’s statement which applies to both lots of land.

19. [19]
    With respect to both properties his objection was expressed in the following terms:^[4]

“I wish to formally object to this new valuation

… it does not take into account some unique disadvantages which are experienced by this site, and are not suffered by the majority of other local properties

In particular this particular property which fronts onto a major rail system carrying heavy freight and passenger loadings is located immediately opposite a major signalling installation which controls close by track crossovers which are in constant operation particularly for heavy goods trains coming and going to the Port of Brisbane and/or the Coopers Plains freight terminal.

It is therefore not uncommon to have freight trains held at these lights pending clearance to divert to the Tennyson rail line connection that leads onto the main track systems that feed the above destinations

Trains can be held at these lights for significant durations, with locomotives noisily idling; this is particularly so during morning and evening peak domestic travel, where the suburban trains have priority.

However with the opening of the Springfield line, suburban traffic has increased considerably, and at peak hours outward bound trains are often held at these lights, with considerable noise being experienced from the on-board transformers”.

20. [20]
    Similarly, with respect to both properties, Mr Toomey included in his objection some observations about events which occurred on a couple of relevant days which he then relied upon to demonstrate the impact of the rail services on the amenity of both properties.

21. [21]
    He said as follows:^[5]

“On the weekend of 25-26 July train services beyond Sherwood were cancelled for weekend maintenance

As is normal practice for such scheduled track maintenance on this western line, train services beyond Sherwood were replaced by buses

From 6:00am on the Saturday morning till late pm Sunday, that part of Honour Ave outside my property became a virtual bus terminal with considerable noise principally from idling engines, safety beeping from reversing buses and conversations from waiting bus drivers

The following weekend all train services along this Western Line were again suspended whilst major maintenance was carried out principally opposite my property because of recent relocation of crossover connections including signalling, and a major access gate to the track system immediately opposite my property.

The noise from this section of the rail tracks during those 2 days was severe

Over the Labour Day holiday weekend (October 3 to 5) there was a virtual repeat of the events of the weekend of July 25/26, when train services beyond Sherwood were curtailed for the full 3 days and bus services substituted from early morning till late evening.

If one was to have his properties on open sales inspection on any of the above 3 occasions I would suspect it would have a very detrimental effect on sale (price) prospects; particularly as these situations occur at least 4 or more times a year”.

22. [22]
    Dealing specifically with the Honour Avenue land, Mr Toomey’s objection said as follows:^[6]

“Likewise when stationary trains are signalled on, they also sound their ‘hooter/whistle’ loudly.

Whilst some adjacent properties might also suffer from this increased noise pollution, the majority would not experience any of the above inconvenience which quite clearly would affect the value of this site

Finally it should be noted that this noise issue has been exacerbated in very recent times because of major upgrading track works and signal relocation to a location more immediately opposite the subject property”.

23. [23]
    With respect to the Prospect Street property, Mr Toomey added the following to his objection in respect of that lot:^[7]

“This particular site suffers from a “funnel” effect in that noises from the rail system and signalling configuration that amplifies such noises particularly in the front of the house and makes the front major bedroom somewhat untenable to the extent that various tenants including the current one have relocated to a bedroom at the rear of the house

This in turn has affected the rental potential for the property, to the extent that the Managing Agent considers the commercial rental of the property without the noise issues of the rail system would be $340 per week; it is currently rented for $260. Whilst some adjacent properties might also suffer from this increased noise pollution, the majority would not experience any of the above inconvenience which quite clearly affects the value of this site.”

The Legal Context

24. [24]
    Pursuant to the provisions of the Land Valuation Act 2010 and its predecessor the Valuation of the Land Act 1944, the Valuer-General has an obligation to undertake a valuation of all properties throughout Queensland on a regular basis. The valuations which emerge from that process are the basis for, amongst other things, the calculation of local government rates and land tax and other related purposes.

25. [25]
    Upon the hearing of an appeal pursuant to s 170 of the LVA this court may either confirm the valuation appealed against or amend the valuation to reduce or increase it to the amount it considers necessary to correctly make the valuation under this act.

26. [26]
    The nature of the valuation exercise which the Valuer-General must carry out is set out in various sections of the LVA.

27. [27]
    In s 7 it is provided that the value of land, if it is non-rural land, is its site value.

28. [28]
    Site value of improved land is defined in s 19 of the LVA as “its expected realisation under a bona fide sale assuming all non-site improvements for the land had not been made.”^[8]

29. [29]
    Necessarily, that definition requires an assessment of the value of the land at the date on which the valuation is made having regard to all factors which might influence the sale price of that land. With respect to each of the lots of the land the subjects of these appeals the ultimate determination requires finding what the site value of each lot is.

The Evidence in the Appeal

30. [30]
    As indicated above, Mr Toomey called no evidence from an expert valuer but did rely upon statements lodged by him setting out the grounds of his appeal and the basis for his objections.

31. [31]
    Shortly put, it seems that the real basis for his concern about the valuations which have been applied to his land is not that the 35% increase in valuation which has been applied to his land is inappropriate, because he recognises that a similar increment has been applied to other local properties.

32. [32]
    What he does say, however, is that the Valuer-General has not been aware of particular detriments to the quiet enjoyment of his property which may not apply to other properties, even those adjacent to his land.

33. [33]
    Mr Toomey gave evidence and I must say that I regard him as a decent honest person exercising his statutory rights, without any particular extravagance in the assertions that he made about the valuation of his land, and I view his evidence accordingly.

34. [34]
    It was clear to me that he properly understood the valuation process and the statutory obligations imposed upon the respondent.

35. [35]
    Equally his evidence satisfied me that he considered the evidence contained in the reports of Mr Heslehurst very carefully but still, in the face of an opportunity to consider those expert opinions, maintained the views expressed by him.

36. [36]
    On numerous occasions this court has cautioned landowners about the difficulties confronted by them in appealing against a valuation determined by the Valuer-General which is supported by the evidence of expert and experienced valuers in circumstances where the appellant elects not to call evidence from a similarly qualified valuer.

37. [37]
    The outcome, which is explained below, in this particular case gives lie to that general observation because, in the instant case, I find that Mr Toomey has been able to identify factors not taken into account by the Valuer-General’s officers which have resulted in the valuation on his land being higher than perhaps should be in the present circumstances.

38. [38]
    I am bound to observe that these are annual valuations and the circumstances which affect a valuation in one valuation period may well change in subsequent valuation periods, with the result that, some impediment being removed or overcome, the subject land will revert to a higher valuation in the future.

39. [39]
    The factors which, according to Mr Toomey, distinguish the quiet enjoyment of his land from that of his neighbours and other land along Honour Avenue (and consequently along Prospect Street) are the activities of Queensland Rail and, in particular, its current practice of using the rail corridor opposite Mr Toomey’s property on Honour Avenue as, in a sense, a storage sector for freight trains which need to switch lines to continue their journey.

40. [40]
    Mr Toomey’s evidence^[9] was to the effect that the storage process for freight trains waiting to switch lines has caused an increased impact by way of railway line noise on his property, constituted by trains starting and stopping, revving up in order to get traction before they move off and generally giving audible signals of the intentions of the drivers.

41. [41]
    Added to that, according to Mr Toomey (and uncontradicted by the respondent), was the utilisation of buses to take passengers beyond the Sherwood Station.

42. [42]
    In his sworn evidence given in the witness box Mr Toomey was generous to Mr Heslehurst in acknowledging his professional competence, and he said this:^[10]

“Well, first of all, I would like to compliment him, I think they’re very good reports.”

43. [43]
    In the witness box Mr Toomey demonstrated knowledge of all the properties identified by Mr Heslehurst in his report.

44. [44]
    Mr Toomey went on to say:^[11]

“I don’t agree on the issue – only one issue I don’t agree on and that’s relating to the relative noise levels of the examples that he’s put forward. I’ve been and spent the last couple of weeks spending time outside those properties listening to the noise and if I could probably explain this way. If I said noise level at 521 was 10 rated, and if I said the one at Prospect Street was seven, then I would have to say that for the two Wylie Street properties it’s about two… For Kenilworth Street, which is about the same distance – that property is about the same distance from the railway line as the Prospect Street one, but there are no traffic lights – there’s no trains held up there and it’s a fairly narrow street coming down and I would put that around about three to four.”

45. [45]
    Then in response to this proposition from me:^[12]

“So your main point is that you live there in the area, you are familiar with the sales or the valuations, to which Mr Heslehurst has referred, you say you have got particular personal knowledge of the sound environment around your house and those other houses?”

Mr Toomey replied, “Yeah”.

46. [46]
    I have not yet referred to the report of Mr Heslehurst but it is sufficient at the present time to say that Mr Heslehurst drew comparisons between those houses referred to by Mr Toomey in his criticism of Mr Heslehurst’s opinions.

47. [47]
    Mr Toomey went on to confirm that his view was that:^[13]

“Comparably, yours experiences more severe noise you don’t feel that has been taken into account in the valuation?”

48. [48]
    Under cross examination, Mr Prasad for the respondent got Mr Toomey to confirm that:^[14]

“The only issue really here, as you stated to your Honour in this court, is that the Valuer-General hasn’t taken into consideration the issue of noise for the subject properties.”

49. [49]
    Mr Toomey identified it as, “the intensity of noise.”^[15]

50. [50]
    In his cross examination of Mr Toomey, Mr Prasad, for the respondent, raised with Mr Toomey whether he had taken any steps to insulate his home from the noise of which he complained.

51. [51]
    Mr Prasad extracted from Mr Toomey an acknowledgement that if Queensland Rail decided to put acoustic barriers along the train tracks that would reduce the noise levels coming to his property.

52. [52]
    That would seem to have been axiomatic but there was no evidence that such an undertaking was proposed by Queensland Rail.

53. [53]
    That appeared to suggest to me that, upon Mr Prasad’s proposal coming to fruition, Mr Toomey would be confronted by an eight foot high grey painted blank wall along the road across the street from his frontage. Mr Prasad’s response was to suggest that, with respect to such walls, “there have been artists that tend to paint murals and things like that to make it more aesthetically pleasing with koalas and kangaroos, etcetera, etcetera.”^[16]

54. [54]
    Mr Prasad took Mr Toomey to the contents of Mr Heslehurst’s report and, in particular, the sales upon which he relied.

55. [55]
    Mr Prasad pointed out that one of the sales relied upon by Mr Heslehurst, being a sale of a property at 13 Kenilworth Street, Sherwood, was a similar distance from the railway line as the property owned by Mr Toomey in Prospect Street.

56. [56]
    Mr Toomey acknowledged that was so but denied that it would suffer similar sorts of noise issues to the subject properties for reasons which Mr Toomey went on to explain.

57. [57]
    He directed the court’s attention to the photographs which he had taken.^[17] He explained that, in his view, the Kenilworth Street property was subject to less noise because there is a very wide funnel down which noise emanated towards the Prospect Street property but a much narrower noise source affecting the Kenilworth Street property.

58. [58]
    That proposition was not sought to be contradicted by Mr Heslehurst in his evidence.

59. [59]
    Mr Toomey also disputed the usefulness of the sales relied upon by Mr Heslehurst of properties located at numbers 1 and 3 Lance Street, Sherwood which were both in the same ownership.

60. [60]
    Those properties were flood affected and were described by Mr Heslehurst as being inferior overall to the subject due to their size and topography, and flooding issues in a superior residential location.

61. [61]
    Mr Toomey pointed out that to his knowledge the properties on the Lance Street land itself were not subject to flooding, which rather suggests that the sites are capable in its unimproved state of providing a flood-free building pad.

62. [62]
    I regard Mr Toomey as an honest and frank witness who did not seek to unnecessarily embroider the points that he wished to make. He answered questions put to him in cross examination frankly and fairly.

63. [63]
    During his cross examination of Mr Toomey I enquired of Mr Prasad:^[18]

“So your questioning concedes that there is a noise impact on Mr Toomey’s property because of these amended switching and stopping arrangements and the presence of bus/rail?”

64. [64]
    Mr Prasad confirmed that was correct and also that on his case Mr Toomey necessarily had to ameliorate the noise impacts by carrying out works on his property.

65. [65]
    Such works, Mr Prasad conceded, would play upon the mind of the hypothetical Spencer purchaser purchasing the site on which Mr Toomey’s home was located – from the perspective of both the need for those extra works and the cost of those extra works.^[19]

66. [66]
    Mr Toomey also made the point that based upon his more than sixty years’ experience as a civil engineer, in his mind, the last thing anybody would do would be to buy flood prone land such as the Lance Street sales mentioned by Mr Heslehurst.^[20]

67. [67]
    In the context of Mr Toomey’s views and evidence about the impact of the railway arrangements, including the bus interchange across the road from his home, and in response to questions about whether he had provided any sales evidence to support his views, he provided the following response:^[21]

“So I really can’t answer your question as to how I would compare. But I do – I – I believe that the – that the impact of that – well, I’ll put it this way. If you had a – a – an open day for inspection and you turned up on the days I’ve quoted in my file note, I don’t think anybody would come through the front gate; it’s just chaos outside.”

68. [68]
    Further, as for the values contended for by Mr Toomey ($720,000 and $690,000) he explained that it was a simple calculation which involved reducing the Valuer-General’s valuation by 10% for the noise factor.^[22]

The Evidence of Craig William Heslehurst

69. [69]
    Mr Heslehurst is a valuer employed by the Department of Natural Resources and Mines and has been a valuer for thirteen years.^[23]

70. [70]
    He gave evidence that he has five years’ experience valuing properties in the Sherwood area.

71. [71]
    Mr Heslehurst’s evidence was to the effect that his professional opinion was reflected in the two reports which he provided to the court.^[24]

72. [72]
    With respect to the one issue which remained of concern to Mr Toomey, Mr Heslehurst told the court^[25] that he had observed both the bus and the train passenger services and he observed freight trains, both of which matters he took into consideration in his valuation evidence.

73. [73]
    However Mr Heslehurst confirmed to the court^[26] that he had not observed:

1. (a)
   The freight trains stopping and idling;

2. (b)
   The noise of them starting off;

3. (c)
   Buses parking and then starting up outside of Mr Toomey’s place to pick up passengers which they appeared to do when they terminated at Sherwood which, on the evidence, they seem to do fairly regularly;

4. (d)
   The freight trains charging up so they could get acceleration and had not heard the noise of them starting off from a stationary position.

74. [74]
    It is appropriate to identify and make some comments on the comparable sales which Mr Heslehurst identified and which assisted him, he said, in formulating his reports.

75. [75]
    Mr Heslehurst’s first sales were in respect of properties located at 1 and 3 Lance Street Sherwood described as Lots 96 and 97 on RP 29712, Parish of Oxley, each of which lost had an area of 445m², were located in the low density residential area and also in the Sherwood – Graceville neighbourhood plan. Lot 96 sold for $465,000 on 13 May 2014 and Lot 97 sold for $485,000 on the 26 October 2013.

76. [76]
    In each case Mr Heslehurst allowed a site value of $420,000.

77. [77]
    Each of those properties were impacted in the January 2011 floods.

78. [78]
    Mr Heslehurst’s views of each of those lots was that they were smaller in size than the subject land and had been impacted in the floods, but had fewer impacts from rail noise and were closer to the Sherwood Arboretum. He thought those sales inferior due to the size, topography and the flooding issues although they were in a superior residential location.

79. [79]
    I have referred to Mr Toomey’s views of those sales earlier in this decision.

80. [80]
    Mr Heslehurst also identified land located at 49 and 53 Wylie Street, Graceville both of which lots are owned by a Mr Buckland and a Ms Keenan. Lots 1 and 2 on RP 60826, Parish of Oxley with an area of 1,017m² are located at 49 Wylie Street Graceville and are located in the low density residential area within the Sherwood –  Graceville neighbourhood plan. These lots sold on 20 July 2013 for $1,001,000.

81. [81]
    Lots 3 and 4 on RP 60826, Parish of Oxley, at 53 Wylie Street, are also 1,017m² in area, and similarly located in the low density residential area within the Sherwood – Graceville neighbourhood plan. They were sold on 16 July 2013 for $998,000.

82. [82]
    Mr Heslehurst’s fifth sale was of land located at 13 Kenilworth Street, Sherwood. It is otherwise described as Lot 2 on SP 242111, Parish of Oxley with an area of 405m² and located in the Character Residential 1 (General) area classification and in the Sherwood – Graceville neighbourhood plan.

83. [83]
    It was sold on 10 March 2015 for $552,500 to which land Mr Heslehurst ascribed and analysed a site value as at 1 October 2014 of $540,000.

84. [84]
    Mr Heslehurst’s observations with respect to that lot of land were as follows:^[27]

“Compared with the subject the sale is smaller in area within a suburban location.

It is impacted by rail noise and is close to the retailing uses on Oxley Road. The sale is within a single unit residential locality.

Overall the sale is considered inferior due to its size in an inferior residential location. However, its impacts from rail noise would be similar to those experienced by the subject property.”

85. [85]
    Mr Toomey disputes that characterisation for the reasons set out in my reference to his evidence.

86. [86]
    Mr Heslehurst in his evidence conceded that, to his mind, the property located in Kenilworth Street was less affected by rail noise than the subject but not significantly less affected.

87. [87]
    Mr Heslehurst confirmed to the court that those noises which he had not heard may have been more significant than the noises that he did hear.^[28]

88. [88]
    In terms of his overall valuation exercise Mr Toomey informed the court that he had inspected the subject properties for the purpose of the objection, reviewed the valuation and was comfortable that the discount he applied was appropriate.^[29]

Conclusion

89. [89]
    Seeking to determine what is the site value of residential land in situations such as the present generally results in valuers resorting to identifying comparable sales which they then analyse in the context of the subject land being valued.

90. [90]
    The object of the exercise is to determine what price might be paid for that (notionally) unimproved land in a transaction between a not-desperate vendor and a not over-interested purchaser.

91. [91]
    As then President Trickett said in Fairfax v Department of Natural Resources and Mines:^[30]

1. “[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).
2. [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.’”

92. [92]
    Despite the legislative change, it is refreshing that the views expressed by the High Court in Spencer, now well over a century ago, remain just as current and relevant today as they did when they were first uttered. It is certainly my view, at least at this stage until other authorities may prove me wrong, to continue to apply the Spencer test under the LVA.

93. [93]
    I am satisfied that Mr Toomey and Mr Heslehurst were honest and sincere witnesses doing their best to assist the court.

94. [94]
    I am also satisfied that in his preparation of his report before the court Mr Heslehurst approached his task in a thoroughly professional way.

95. [95]
    However, it is clear that the noise environment which affects both of Mr Toomey’s properties isn’t intermittent but significant – the magnitude of which had not occurred to Mr Heslehurst. Indeed he may not have been aware of it.

96. [96]
    He frankly conceded that he had not heard any or observed any of the more significant noise generating events to which Mr Toomey drew the courts attention.

97. [97]
    The valuation exercise conducted by the Valuer-General is an annual or bi-annual event and if conditions change in the future then those conditions may be taken into account in any future valuations.

98. [98]
    In the context of the currently appealed valuations, however, I am satisfied that Mr Heslehurst failed to give sufficient weight to the noise factors of which Mr Toomey complained.

99. [99]
    I am further satisfied that further allowance for that unobserved noise impact should be allowed.

100. [100]
     The court was not assisted by the presentation of any proper acoustic evidence and in doing the best I can in all the circumstances I intend to apply a 5% discount to the valuations contended for by Mr Heslehurst so that in respect of the original valuation of the property located at 521 Honour Avenue, Sherwood of $800,000 as at 1 October 2014, I determine that the valuation be reduced by 5% to $760,000. In respect of the original valuation of the property located at 8 Prospect Street, Sherwood of $770,000 as at 1 October 2014, I determine that the valuation should be reduced to by 5% to $730,000 (in round terms).

Orders

1. Appeal LVA311-15 is allowed.
2. The site value of Lot 4 on RP 229830, Parish of Oxley (521 Honour Avenue, Sherwood) is determined at Seven Hundred and Sixty Thousand Dollars ($760,000) as at 1 October 2014.
3. Appeal LVA312-15 is allowed.
4. The site value Lot 3 on RP 229830, Parish of Oxley (8 Prospect Street, Sherwood) is determined at Seven Hundred and Thirty Thousand Dollars ($730,000) as at 1 October 2014.

WL COCHRANE

MEMBER OF THE LAND COURT