Land Court dismisses appeal concerning valuation of land

In brief

The case of Beydoun v Valuer-General [2017] QLC 36 concerned an appeal to the Land Court by the Appellant against the Valuer-General's rejection of the Appellant's objection to the assessment of the Appellant's site located at 227 McLeod Street, Cairns.

The Court ultimately found that the Appellant had not discharged the onus of proof that there was an error in the Valuer-General's original assessment and accordingly the appeal was dismissed.

The Court stated that the appeal was a re-hearing limited to the grounds of the appeal where the onus of proof on the balance of probabilities was borne by the Appellant

The Appellant's site value was assessed by the Valuer-General to be $305,000 as at 1 October 2015. The Appellant objected to the Valuer-General's assessment, instead contending that the site value was no more than $230,000, being the assessment by the Valuer-General as at 1 October 2014. The Valuer-General rejected the objection.

The Appellant subsequently appealed the Valuer-General's rejection and relied upon the following grounds of appeal:

• the increase in the Valuer-General's assessment was not justified because real estate values in Cairns had fallen;
• the Valuer-General's assessment did not adequately account for the disadvantages of the site;
• the Valuer-General's assessment was excessive compared to the Valuer-General's assessment of the adjacent property at 229 McLeod Street, Cairns.

The Court stated that the appeal was a re-hearing which was limited to the grounds of appeal and that the Appellant held the onus of proof on a balance of probabilities.

The Court found that the Appellant's argument in respect of a falling real estate market did not challenge the Valuer-General's assessment of the site

The Appellant argued that the Valuer-General's assessment of the site was not justified on the basis that the report by Herron Todd White called CairnsWatch, stated that the "Cairns median house price trend is continuing to slowly ease… to be 4.3.% lower than it was in October 2015".

The Court determined that the Appellant's reliance on the extract of the report did not challenge the Valuer-General's assessment for the following reasons:

• the statement made in the report formed part of a trend analysis of the Cairns region as a whole;
• the report provided for a median property price which did not necessarily equate to movements in individual sales;
• the report related to trends for properties rather than land prices;
• the report related to a period which was after the date of the Valuer-General's assessment of the site.

The Court found that the Valuer-General's assessment did adequately account for the disadvantages of the site

The Appellant argued that the Valuer-General's assessment was excessive because it did not adequately account for the site's narrow 12 metre frontage which constrained development and the issues with drainage on the site after heavy rain. The Appellant contended that the combination of these disadvantages meant that the value of the site was worth 25% less per square metre than the adjoining property at 229 McLeod Street.

Firstly, the Valuer-General accepted that the narrow frontage was a disadvantage of the site and stated that the site value would have been assessed at a much higher rate if the site had the typical 20 metre frontage. The Valuer-General submitted that it ultimately relied on the analysis of the sale of 28 Grove Street, Cairns which had a comparably narrow frontage of 11 metres to assess the value of the site.

Secondly, the Valuer-General did not accept that the drainage issue represented a significant issue in assessing the value of the site and stated that each of the comparable sales involved land which would have required minor site works prior to development. The Court accepted the Valuer-General's submission that if the site was vacant the drainage issue could be resolved by some minor earthworks. As such, the Court was not persuaded by the Appellant that the Valuer-General's assessment failed to adequately assess the disadvantages of the site.

The Court found that the assessment of 229 McLeod Street was not a comparable sale and therefore the Valuer-General's assessment was not excessive

The Valuer-General valued the site to be $301.38 per square metre which the Appellant argued was excessive given that the Valuer-General had assessed the adjacent site at 229 McLeod Street to be $278.95 per square metre for a 3,549m² block of land.

The Court accepted the Valuer-General's submission that it was an accepted valuation principle that the rate per square metre was lower for larger properties.

The Appellant also referred to the percentage increase in the last two assessments of the site to support the argument that the Valuer-General's assessment was excessive. However, the Court held that the percentage increase in the assessment of the site did not demonstrate that the assessment was excessive "if it is supported by bona fide sales of comparable parcels of land".

The Court found that the sales data relied upon by the Valuer-General provided an appropriate basis for assessing the value of the site. Further the Court determined that the Appellant did not establish that the Valuer-General incorrectly analysed the comparable sales for the site and the appeal was dismissed.