Copley v Department of Natural Resources and Mines [2007] QLC 110

LAND COURT OF QUEENSLAND CITATION: Copley v Department of Natural Resources and Mines [2007] QLC 110 PARTIES: Denise C & Gregory C Copley (appellants) v. Chief Executive, Department of Natural Resources and Mines (respondent) FILE NO: AV2005/0516 DIVISION: Land Court of Queensland PROCEEDING: An appeal against an annual valuation of land under the Valuation of Land Act 1944. DELIVERED ON: 12 November 2007 HEARD AT: Beaudesert and Brisbane DELIVERED AT: Brisbane MEMBER: Mr RS Jones ORDERS: 1. The appeal is allowed. 2. The unimproved value of Lot 31 on Registered Plan 106105 Parish of Maclean as at 1 October 2004 is determined in the amount of $160,000. CATCHWORDS: Valuation of land under Valuation of Land Act 1944 – use of sales – effect of flooding – onus of proof. APPEARANCES: Mr G C Copley, in person for the appellants. Mr M Heather, Principal Lawyer, Department of Natural Resources and Water, for the respondent. Background [1] Mr and Mrs Copley are the registered proprietors of a parcel of land located at 1-23 Arthur Road, North Maclean about seven kilometres north of the township of Jimboomba. The land is more properly described as Lot 31 on Registered Plan 106105, Parish of Maclean. -- 1 of 8 -- 2 [2] Pursuant to the Valuation of Land Act 1944 (VLA) the Chief Executive determined the unimproved value of the subject land as at 1 October 2004 in the amount of $170,000. Dissatisfied with that assessment Mr and Mrs Copley have appealed to this Court to have it reduced. Their estimate of the unimproved value is $95,000. [3] At the hearing of the appeal the appellants were represented by Mr Copley in person. Mr Copley is not a valuer and does not otherwise have expertise in any areas of study relevant to this appeal. The Chief Executive was legally represented by Mr M Heather and relied on the evidence of Mr David FitzGerald a registered real estate valuer. Both Mr Heather and Mr FitzGerald are employed by the Chief Executive. [4] Mr FitzGerald was not the valuer responsible for the original assessment of the valuation appealed against. However, for reasons which were not made entirely clear he was the valuer upon which the Chief Executive relied to defend his valuation. In this context, Mr FitzGerald gave evidence that his valuation report (Exhibit 2) was the product of his own investigations and the exercise of his own professional skill and judgment. Characteristics of the Land [5] As at 1 October 2004 the whole of the subject land (7.375 hectares) was zoned Rural Residential A under the town plan of the Beaudesert Shire Council. Consistent with that zoning the land was being used for rural residential purposes at the date of valuation. The land has extensive frontage to the Logan River and generally speaking slopes downwards from Arthur Road to the river. The land has a history of flooding to varying degrees and during the extensive 1974 floods, a significant portion of the land was inundated. The actual extent of that inundation was the most critical issue in this appeal. The Grounds of Appeal [6] The notice of appeal identifies 10 grounds which fall into six general categories. First, as identified above, the extent of flooding over the land and the appropriate discount to take into account that flooding. (Grounds 1, 2, and 8). Second, the extent of noxious weeds affecting the property. (Ground 3). Third, the limited extent of benefits, (if any), associated with the river frontage. (Grounds 4, 5 and 6). Fourth, the impact of noxious industrial odours on the value of the land. (Ground 7) Fifth, the imposition of restrictions on use of the river flats. (Ground 9) Lastly, the impact on value caused by power lines which cross the property. (Ground 10) Some Relevant Statutory Provisions [7] As the subject land is improved land it is required to be valued in accordance with s.3(1)(b) of the VLA. That is, on the assumption that as at the relevant date of valuation the improvements on the land did not exist. Pursuant to s.33 of the VLA the valuation -- 2 of 8 -- 3 appealed is deemed to be correct and therefore the appellants bear the burden of proving it is wrong. Further, pursuant to s.45(4), the burden of proving every ground of appeal relied on also lies with the appellants. In Brisbane City Council v The Valuer-General1 Gibbs J, as he then was, in delivering the leading judgment of 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. Issues in the Appeal (i) Flooding [8] When valuing the land, based on inquiries he made of the Beaudesert Shire Council, Mr FitzGerald proceeded on the basis that in the 1974 flood water levels reached about 25 metres State Datum (RL25). Based on a RL of 25 metres Mr FitzGerald estimated that approximately 3,600 m² of land near Arthur Road would be above 1974 flood levels. As it turned out the council's designated flood level for the land was 24.5 metres however, not much seems to turn on this difference. On the other hand, the evidence of Mr Copley was that the 1974 flood reached a level of about 27 metres and that accordingly only some 750 m² of land would be above that level. Mr FitzGerald estimated that if the 1974 flood did reach RL27 then there would be about 1,000 m² of such land. [9] The importance of this debate is significant. The evidence is, as I understand it, that residential development (and no doubt many other forms of development) would not be permitted or would only be permitted by the Council below 1974 flood levels with quite stringent and expensive conditions. In this context Mr Copley also said that the extent of the flooding over the land prevented it being subdivided and otherwise used for income producing purposes.2 However, it is tolerably clear that Mr FitzGerald valued the land on the basis of it having no subdivision or other income producing potential. [10] In support of his contention that the 1974 flood reached RL27 on the land Mr Copley relied on his observations and oral and written statements of others. The authors of the various admissible statements and documents relied on by Mr Copley were not called. [11] In hopefully what is a fair summary of the more important facts and matters relied on by Mr Copley, he in particular relied on observations and reports concerned with the effect of the 1974 floods on various creeks including Thompson Creek and Norris Creek; statements, observations and recordings of the levels of the flood at Macleans Bridge including meteorological observations and reports prepared by surveyors and 1 (1977 – 78) 140 CLR 41 at 56 – 57. 2 Notice of Appeal – Ground 1. -- 3 of 8 -- 4 observations concerning 1974 flood levels reached on what Mr Copley described as "the white Spanish house" located at the end of Arthur Road and at another nearby location called the "Round House Shop". Mr Copley also referred to finding river sand which he said would have been left over from the 1974 flood in a concrete slab located where part of the present main residence is now situated. [12] Notwithstanding the wide ranging nature of the evidence relied on by Mr Copley, at the end of the day I was not convinced that either separately or as a whole that evidence proved that the appropriate designated flood level for the land should be RL27. It is my opinion that the knowledgeable and prudent vendor and purchaser prescribed in Spencer v The Commonwealth3 would proceed, as did Mr FitzGerald, on an acceptance of the advice provided by the council. [13] Turning then to the sales evidence relied on by Mr Copley and Mr FitzGerald, while it is recognised that generally speaking the best evidence of unimproved value will be the sales of vacant or lightly improved comparable land,4 it is self evident that if the sale land cannot sensibly be compared to the subject land then the evidence about that sale is unlikely to be of any probative value. [14] In my opinion the sales relied on by Mr Copley in Edgewater Drive and Wharf Street are not comparable. The best evidence is that both parcels of land were entirely inundated by the 1974 flood and that any meaningful development, including residential development, on them would be likely to attract significant and expensive development/building conditions. [15] It is also my opinion that Mr FitzGerald's sales 1, 2 and 3 are of little assistance for several reasons. They are significantly smaller flood free parcels of land located in a more modern rural residential setting. More significantly none of these lots have any river frontage, a fact that Mr FitzGerald considered had a material affect on value. [16] Mr FitzGerald's sale 4 is of a size which makes it more comparable to the subject and, more importantly, involves river frontage flood affected land. However, major points of difference between them are that sale 4 has significantly less river frontage and about 3.4 hectares of land which was not affected by the 1974 flood whereas the subject has only 3,600 m² of such land. In this context Mr FitzGerald's evidence was to the effect that when he analysed this sale and compared it to the subject, allowance had been made to take into account the material superiority of the sale land. Mr FitzGerald analysed sale 4 to an unimproved value of $330,000, nearly twice that applied to the subject. 3 (1908) 5 CLR 418. 4 Clough v Valuer-General [1981] 8 QLCR 70 at 76 (LAC); Fischer v Valuer-General [1983] 9 QLCR 44 at 46 (LAC); Grahn v Valuer General [1992] 14 QLCR 327 at 328 (LAC). -- 4 of 8 -- 5 [17] While Mr FitzGerald's evidence concerning the comparison of sale 4 to the subject land was not always entirely clear, Mr Copley was not able to seriously challenge his expert opinion in cross-examination and did not otherwise advance any probative evidence which seriously challenged the opinions expressed by Mr FitzGerald or otherwise advanced his case on this topic. [18] On balance, while the evidence is not entirely satisfactory I consider that Mr FitzGerald's sale 4 does provide reliable evidence of value and that Mr Copley has not shown that his analysis of the sale and its application to the subject land was erroneous. Accordingly, I find that the appellants have not proved that the valuation ought to be varied by virtue of any the matters raised in grounds 1, 2 and 8. (ii) Noxious Plants (Ground 3) [19] I accept Mr Copley's evidence that the land is affected by noxious plants and that the extent of this problem is exacerbated by the extent of its river frontage. Mr FitzGerald was generally prepared to accept the existence of the problem identified by Mr Copley (but perhaps not to the same extent), however, he went on to say that this was a problem associated with nearly all river frontage land and that the benefits associated with having direct access to the river, albeit even in drought times, would tend to outweigh the associated problem of noxious plant growth. There was no serious challenge to Mr FitzGerald's evidence about this and I accept it. Also of importance is the fact that Mr Copley did not put before the Court any probative evidence about how and to what extent the value of the land would be diminished because of this problem. (iii) Physical Characteristics of the River (Grounds 4, 5 and 6) [20] As I understand Mr Copley's evidence, a combination of drought conditions and the construction of weirs on the Logan River has reduced the river in the location of the subject land to effectively nothing more than a dry river bed. This has seriously reduced the amenity the river once provided (e.g. for swimming, fishing and other recreational pursuits) and has led to a destruction of natural habitat for wildlife. [21] Also, according to Mr Copley, the condition of the river has been in a state of steady decline since the early 1990's and the ability to irrigate the land has been dramatically reduced since then. In this context Mr Copley was again critical of Mr FitzGerald's reliance on his sale 4. According to Mr Copley this land was not only superior because of the extent of flood immunity it enjoyed but also because of its location and superior river frontage with more permanent water. Mr FitzGerald responded to these criticisms by saying that he took the superiority of the sale 4 land into account when comparing it with the subject land and that when the drought conditions ended Mr and Mrs Copley would be -- 5 of 8 -- 6 entitled to some irrigation water from the Logan River. In cross-examination Mr Copley agreed that the section of river passing sale 4 was tidal and likely to be saline. According to Mr FitzGerald, that would affect the ability to use that river water in any beneficial way for irrigation and that and that the positives and negatives of having drought affected but fresh water river frontage compared to more permanent but saline water tended to cancel one another out. [22] Mr FitzGerald did not tempt to expand on or explain by reference to any helpful evidence his theory about the different river frontages and it is my overall opinion that a number of Mr FitzGerald's answers concerning this issue involved as much speculation as consideration. However, as has been the case in respect of a number of the issues raised by Mr Copley, he has failed to put before the Court sufficient evidence to justify a reduction in value based on the deteriorated condition of the river. (iv) Noxious Odours (Ground 7) [23] These odours emanate from a mushroom farm located slightly to the north and west of the land. According to Mr Copley the odours are regularly blown over by winds from a westerly direction and tended to be at their worst from late afternoon into the early evening. I accept Mr Copley's evidence about these matters. Mr FitzGerald accepted that the subject land would be affected by odours from the mushroom farm but it was his opinion that the problem was common to all of the sales relied on by him in his valuation exercise. On balance I prefer the evidence of Mr Copley that the noxious odours tend to move from the mushroom farm in a generally easterly direction. Sales 1, 2 and 3 relied on by Mr FitzGerald are to the west of the subject land and, accordingly, in my opinion would not be as seriously affected. Mr Copley initially contended that Mr FitzGerald's sale 4 would not be as seriously affected as the subject land however, he was later prepared to accept that it probably would be but perhaps not quite as much. [24] During cross examination Mr FitzGerald acknowledged that the noxious odours were definitely an issue in the area but that it was very difficult to quantify just how they affect land values. When pressed by Mr Copley in cross-examination, Mr FitzGerald expressed the view that they had no effect on value. [25] I have some difficulty in accepting Mr FitzGerald's opinion that these odours would have no effect on value. However, whilst Mr Copley has proved that his land is materially affected by odours and, importantly, more so than the first three sales relied on by Mr FitzGerald, he has not been able to prove in any quantitative way just how these odours would affect value. Accordingly, while I have some sympathy for Mr Copley on this -- 6 of 8 -- 7 issue, on the evidence before me, I do not consider that I am able to make any reduction in value because of it. (v) Use of the River Flats (Ground 9) [26] Mr Copley and his wife intended to establish an exercise trail for their horses on the lower terraces of their land adjacent to the river. This use was refused by the then Department of Natural Resources on 11 November 1996. It would appear that this use was inconsistent with the department's then river bank management policies. It was not entirely clear whether that was still the current thinking of the Chief Executive but I will proceed on the basis that it is. Again, however, Mr Copley advanced no probative evidence to suggest just how this restriction might affect the value of the land. [27] The lower part of the land which might be affected by this restriction is probably more than 50% of the total land area. However, there was no suggestion that a horse trail could not be located elsewhere on the balance land and, in Mr FitzGerald's opinion, a restriction such as this would not have any material impact on value. This evidence of Mr FitzGerald was not seriously challenged and I accept it. (vi) Power Lines (Ground 10) [28] The power lines are, according to Mr Copley, owned by Energex and carry some 11,000 volts and the poles supporting the power lines are in a very poor and dangerous condition. The lines are not protected by an easement but by what was referred to as a "way leave" and are located about 100 metres east of the residence nearest Arthur Road close to existing structures which I understand includes sheds and a "granny flat".5 According to Mr Copley the existence of these power lines poses a threat not only to he and his wife but also to livestock. [29] Mr FitzGerald was aware of the power lines and it was his initial opinion that they would have no impact on value. However, he later conceded that their detrimental effect on value probably should be taken into account and that some discount would be appropriate. In this context Mr FitzGerald conceded that a discount of "a few percent", maybe up to 5% might be justified.6 [30] Having regard to the combined evidence of Mr Copley and Mr FitzGerald I intend to allow some reduction in value for the existence of these power lines. The extent of this reduction will be addressed below. Conclusions [31] For the reasons expressed above I find that the appellants have failed to prove that the valuation appealed against is wrong and ought be varied for any of the matters and 5 See generally Ex. 6B. 6 T. 103. -- 7 of 8 -- 8 reasons expressed in grounds 1 to 9 inclusive of their grounds of appeal either when taken separately or cumulatively. [32] In respect of ground 10, I find that some adjustment is necessary and that the evidence is that the discount should be in the order of 5%. In the circumstances of this appeal I will adopt a 5% discount for the existence of the power lines which results in a figure of $161,500 which I will round down to $160,000 for practical purposes. In reaching this conclusion I express no view about the safety of the power lines as the only evidence about that was given by Mr Copley who, in my view, is not properly qualified to express such opinions in the absence of any objective evidence in support. [33] Accordingly, the orders of the Court are: 1. The appeal is allowed. 2. The unimproved value of Lot 31 on Registered Plan 106105 Parish of Maclean as at 1 October 2004 is determined in the amount of $160,000. MEMBER OF THE LAND COURT -- 8 of 8 --