St Columb Ltd V Department of Natural Resources and Water [2006] QLC 67

LAND COURT OF QUEENSLAND CITATION: St Columb Ltd v Department of Natural Resources and Water [2006] QLC 67 PARTIES: St Columb Ltd (appellant) v. Chief Executive, Department of Natural Resources and Water (respondent) FILE NO: AV2005/0608 DIVISION: Land Court of Queensland PROCEEDING: Appeal against an annual valuation of land under the Valuation of Land Act 1944. DELIVERED ON: 20 October 2006 DELIVERED AT: Brisbane HEARD AT: Cairns MEMBER: Mr RS Jones ORDER: Appeal AV 2005/0608 is allowed and the unimproved value of Lot 4 on Crown Plan CWL 369, Parish of Dunkalli is determined in the amount of one million one hundred thousand dollars ($1,100,000). CATCHWORDS: S.33 Valuation of Land Act 1944 – Presumption of correctness of statutory valuation – comparable sales – unacceptable sales – relativity with other unimproved values. APPEARANCES: Mr Veall, for the appellant Mr W Isdale of Crown Law for the respondent. [1] St Columb Ltd, the appellant, has appealed against the assessment of the unimproved value of its land by the Chief Executive, Department of Natural Resources and Water, the respondent to the appeal. [2] The unimproved value determined by the respondent pursuant to the Valuation of Land Act 1944 as at 1 October 2004 (effective as at 30 June 2005) is $1,300,000. In its notice of appeal, the appellant's estimate of the unimproved value was $500,000 but at the hearing of the appeal it contended for a value of $650,000. [3] The appellant was represented by Mr I Veall, a director of the appellant company. The respondent was legally represented by Mr W Isdale of counsel employed by Crown Law. Both parties relied on the evidence of registered real estate valuers. Background [4] The appellant is the registered proprietor of Timana Island which is located east of Tully and approximately 5.5 kilometres southeast of the South Mission Beach public boat ramp. The island is more properly described as Lot 4 on Crown Plan CWL 369 Parish of Dunkalli, County of Cardwell and contains an area of 15.98 hectares. [5] The island is made up of moderate to steeply sloping land which, to a large extent, is thickly vegetated with tropical scrub down to the high water line. None of the usual urban services and amenities are available and there is no scheduled regular transport to and from the island. As at 1 October 2004 the island was zoned Natural Resource Protection under the Interim Planning Scheme for the Council for the Shire of Cardwell. [6] Improvements on the island are really limited to a timber dwelling which is approximately 20 years old and some minor ground improvements. Issues in the Appeal [7] Consistent with the provisions of s.3(1)(b) of the Valuation of Land Act 1944 (VLA) the valuers for both parties valued the island on the basis that the improvements on it did not exist. Also, having regard to the use to which the island was being put as at the date of valuation it was treated by the respondent, pursuant to s.17 of the VLA, as a large single unit residential site. [8] Pursuant to s.33 of the VLA, the valuation appealed against is deemed to be correct and therefore the appellant bears the burden of proving that it is wrong. In Brisbane City Council v Valuer General1 the High Court considered that the presumption in favour of the correctness of the statutory valuation may be rebutted where it can be shown that the valuation was based on a wrong principle and/or involved a significant error of fact and/or was made by a fundamentally erroneous method. Also of relevance in appeals such as this is that pursuant to s.45(4) of the VLA the appellant is limited to the grounds stated in its notice of appeal and bears the burden of proving each and every ground of appeal relied on. 1 (1977 – 78) 140 CLR 41 at 56-57: See also G Cominos & Co Pty Ltd v Chief Executive, Department of Lands (1996 – 97) 16 QLCR 311 at 331 -332 (LAC). 2 [9] In its notice of appeal the appellant set out a number of facts and circumstances upon which it relied to show that the island was unique in comparison to other islands within the same general vicinity. At the end of the day the real contest between the valuers came down to trying to identify the most reliable sales evidence and how the valuation appealed against sat, in relative terms, with the unimproved values applied by the respondent to other islands or large residential allotments located on other islands. Both valuers readily conceded that their task was a difficult one made all the more difficult because of the lack of truly comparable sales evidence. [10] Mr Purcell, the valuer called on behalf of the appellant, in arriving at his valuation had regard to three island sales and the sale of two large home sites on East Bedarra Island which are part of a relatively exclusive group title complex. In addition to the sales evidence, Mr Purcell also had regard to the unimproved value attributed to a number of other islands extending along the northern coastline of Queensland. It was Mr Purcell's opinion that when regard was had to the reliable sales evidence and the levels of unimproved values attributed to the other islands, the valuation appealed against was excessive. [11] Mr Cross, the valuer called on behalf of the respondent, had regard to not only island sales but also sales of mainland beachside lots located at Wongaling and Mission Beaches. Like Mr Purcell, Mr Cross also sought to draw some comfort from the relativity between the unimproved value attributed to the subject island and the unimproved values attributed to other island properties. The Sales Evidence Orpheus Island [12] This island has been extensively improved with, according to Mr Purcell, a full-scale tourist resort including guest facilities, administration buildings, staff quarters, a helipad and a jetty. The island had not been recently inspected by Mr Purcell and no attempt was made to carry out any meaningful analysis of the details of the sale including the value of the improvements on the land. In the circumstances of this appeal I am of the opinion that the sale of this island provides no reliable evidence of the unimproved value of the subject. Pumpkin Island [13] The sale of this island was relied on by both valuers. (Mr Purcell's Sale 2 and Mr Cross' Sale 6). Neither valuer had carried out a physical inspection of this island. In fact, Mr Cross had not carried out an on-site inspection of the subject island although did carry out a close view of it by boat. 3 [14] Pumpkin Island has been developed with six fairly primitive cabins erected on it, each capable of generating holiday rental income. Mr Purcell analysed this sale to show a land value of $400,000. This figure was arrived at by giving a value of $900,000 to the improvements on the island. As I understood Mr Purcell's evidence about this, the figure of $900,000 was arrived at having regard to the income generating potential of the cabins. [15] At page 9 of his report (Exhibit 3), Mr Cross shows an analysed value of the land ex- improvements in the amount of $790,000. However, as the evidence emerged, it became clear that the figure of $790,000 came from an analysis of this sale by another valuer, Mr M McCosker.2 Unlike Messrs Cross and Purcell, Mr McCosker had inspected the island and attributed a value to the improvements of only $452,401. A value of $7,200 was attributed to plant and machinery. Mr McCosker was called by Mr Isdale to give evidence and was cross-examined by Mr Veall. In circumstances where Mr McCosker was the only valuer who had carried out an inspection of Pumpkin Island, I prefer his largely unchallenged evidence concerning the analysis of its sale. [16] Pumpkin Island is in a different location to the subject being situated in the Keppel Island group east of Rockhampton. Apart from its location, it is also significantly different from the subject in respect of a number of physical characteristics. It is much smaller and, in my opinion more significantly, it is a less attractive island. In this context Mr Purcell conceded in cross-examination that in terms of aesthetic appeal it would "not come close" to the subject. [17] It was Mr Purcell's opinion that, having regard to the income potential associated with Pumpkin Island it was overall slightly superior to the subject. Overall, Mr Cross thought Pumpkin Island was inferior but he had not physically inspected this island or the subject island. When pressed in cross-examination Mr Purcell conceded that when the islands were compared on an unimproved basis Pumpkin Island was "somewhat inferior" to the subject. Mr McCosker, the only person who physically inspected the island, was not asked to comment about this issue. [18] Given the state of the evidence concerning this sale I consider it is only able to be used in any meaningful way by establishing a base line for the subject. That is, in my opinion, the unimproved value of the subject cannot be less than $790,000. It follows from this that I find Pumpkin Island to be inferior to the subject. 2 See Exhibit 6. 4 The East Bedarra Island Site Sales [19] In his report, Mr Purcell refers to the sale of two group title lots on East Bedarra Island.

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