Brown v Chief Executive, Department of Natural Resources and Mines [2002] QLC 62

LAND COURT OF QUEENSLAND CITATION: Brown v Chief Executive, Department of Natural Resources and Mines [2002] QLC 62 PARTIES: Janice L and Terrance M Brown (applicants) v Chief Executive, Department of Natural Resources and Mines (respondent) FILE NO/S: AV2001/0550 DIVISION: Land Court of Queensland PROCEEDING: Appeal against an annual valuation DELIVERED ON: 6 August 2002 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: Dr NG DIVETT ORDER: 1. The appeal is dismissed, and the unimproved value of Lot 171 on RP 105652 as determined by the Chief Executive in the sum of Forty-nine Thousand Dollars is affirmed. CATCHWORDS: Statutory valuations – Valuation of Land Act 1944 – onus of proof – Failure to demonstrate severity of noxious odours. APPEARANCES: Mrs J Brown for the Applicants Mr D Grealy, Crown Law, for the Respondent Background: [1] This matter relates to land at the corner of Caltowie Avenue and Keala Court, Banksia Beach, Bribie Island, and described as Lot 171 on RP 105652, Parish of Woorim. The subject land has an area of 529 m², and has good access to Caltowie Avenue and Keala -- 1 of 10 -- 2 Court, both of which are bitumen sealed with concrete kerbing and channeling. All normal utility services are available. The subject land is zoned as “Residential A” under the Town Plan for the Caboolture Shire Council of 12 March 1988, effective at the date of valuation of 1 October 2000. The key issues are comparisons of sales, impact of a sewerage pumping station and relativity. [2] On 26 April 2001 the Chief Executive issued a valuation of the subject land at $51,000. Following an objection the Chief Executive revised the unimproved value to $49,000 on 1 July 2001. The appellants have now appealed, claiming the unimproved value should more properly be $40,000. [3] Janice L Brown appeared and gave evidence on behalf of the appellants. Mr D Grealy, counsel of Crown Law appeared for the respondent, calling evidence from Anthony Fitzpatrick, the departmental registered valuer responsible for determining the valuation. History of the land – [4] Mrs Brown explains that the appellants have occupied the subject land for about 21 years, since they moved to Bribie Island for health reasons. About five years ago a sewerage pumping station was established in the area by the Caboolture Shire Council (the Council). Mrs Brown argues that for the first few years of its operation, there had been no unpleasant odours emanating from the sewerage pumping station. However of recent times, since the gradual increase up to 2,000 homes now being serviced by that pumping station, the occasional smells are quite offensive, causing the appellants to seek relief by closing windows on the north and eastern sides of their dwelling. Mrs Brown explains that the smells are intermittent, and irregular, and tend to correlate with prevailing breezes from an easterly direction. She also advises that neighbours across Caltowie Avenue (Lot 165) also close their windows when the smells emanate. [5] Mr Fitzpatrick acknowledges that the appellants had complained of the offensive smells, but advises that during his several visits to the area associated with the objection and preliminary conference processes of this matter, he had been unable to experience the odours personally. Mr Fitzpatrick was also unaware of any other complaints by other neighbouring owners, but he had provided any benefit of doubt to the appellants, accepting that irregular spasmodic odours did occur in that area. [6] Mrs Brown advises that following her objection, the respondent had reduced the unimproved value from $51,000 to $49,000, without any further discussions between the parties. The appellants believe that inadequate allowance has been made for the unpleasant odours, arguing that the unimproved value should not have increased since -- 2 of 10 -- 3 about when the sewerage pumping station was installed. It is their estimate that an unimproved value of $40,000 should reflect that previous valuation. The Nature of Land – [7] It is agreed that Caltowie Avenue lies along an old sand ridge which is about the highest land in that area, and was originally part of the Banksia Beach town. The subject land tends to lie at the top of a shallow rise, with lands sloping gently away in all four cardinal directions. Mrs Brown explains that when they first occupied the land, large king tides from Dux Creek to the south reached the boundaries of the subject land. Subsequently all of that land to the south and east has now been filled and developed as new building lots. [8] Mr Fitzpatrick supports that information, noting that fill has been allowed for on all of the lands to the south of Caltowie Avenue, except for Lots 172, 173 and the subject land (Lot 171). He noticed that while large quantities of fill had been placed towards the southern end of Keala Court, the information available from the developers showed an average depth of 1.1 metres of fill across all of the areas, external to the subject land. Clearly the pathway at the southern end of Keala Court allows not only for pedestrian access to Cosmo Avenue to the south, but also storm-water drainage to Dux Creek. [9] Mrs Brown agrees that the subject land enjoys a pleasant relatively private environment, with little noise intrusion. In fact she agrees generally overall with Mr Fitzpatrick’s assessment of the land, including the good landscaping and the visual aspects of the sewerage pumping station, which has been screened by fencing. However she argues that the impact of the occasional odours has been underestimated by Mr Fitzpatrick. [10] Mrs Brown advises that she has spoken to parents as they accompany children to the Banksia Beach Primary School to the north-east of the subject land. She notes that as those parents approach the parkland pathway around the pumping station, situated about 30 metres north-east of the subject land, they had occasionally noticed the smells. The parkland pathway passes across the parkland (Lot 901 on SP 143545), before joining a zebra crossing across Sunderland Drive to the school site (Lot 101). Relativity – [11] To support his valuation Mr Fitzpatrick provides a relativity map of that area (Exhibit 4). He draws comparisons in particular with Lot 165 ($47,500) across Caltowie Avenue to the north. He notes that has greater exposure to traffic as it fronts Sunderland Drive to the north and Caltowie Avenue to the south. Mr Fitzpatrick also draws support from the -- 3 of 10 -- 4 corner Lot 172 across Keala Court to the west ($51,000), and Lot 173 ($49,500), and also Lot 539 ($47,000) to the south of the subject land. [12] Mr Fitzpatrick explains that in allowing for the average fill of depth 1.1 metres for a 600 m² parcel, he has provided $7,000 for fill to bring to a site value in direct comparisons with the subject land, which has no filling in existence. He then draws the following direct comparisons: Lot Unimproved Value Allowance for fill Site value 539 $47,000 $7,000 $54,000 172 $51,000 - $51,000 Subject land $49,000 - $49,000 [13] Mr Fitzpatrick draws further support from the relativity map for the newly developed parcel to the east of the subject land. He notes that all of those new parcels were also filled, and each is currently valued higher than the subject land. He notes that Lot 45 immediately east of the subject land is a battle-axe parcel of 985 m², and has an unimproved value of $60,000. That parcel has been constructed with a high timber sound-proofing fence to restrict noise from Sunderland Drive to the north. Mr Fitzpatrick advises that it has an asking price for sale at present of $85,000. Mrs Brown notes that those new lots are being sold as house and land packages. Mr Fitzpatrick advises that there have been no recorded sales in that Seafarer Place to the east, but that the developers have indicated that some lots towards the rear of that estate have an asking price at around $100,000. Impact of Sewerage – [14] Mrs Brown explains that she has complained to the Council, who have yet to acknowledge that the spasmodic odour is a problem at the sewerage pumping station. However the Council has agreed to inspect the site, and Mrs Brown is awaiting a detailed response from the Council. She acknowledges that the two 30 kw pumping station is immediately opposite the Primary School, but she has no knowledge whether there have also been official complaints from the school about the odours. She explains that the pumping station is not yet working to full capacity, and anticipates the situation deteriorating as further home sites are connected to the system. [15] Mrs Brown notes that the odours occur about at least once per week, but it is not yet a daily occurrence. She is currently hopeful of a positive response from the Council, who may be able to overcome the odours. She explains that it appears to be an intermittent -- 4 of 10 -- 5 problem with the pumping station, as it doesn’t occur all the time that the pumping station is working. Mrs Brown has spoken to some people who live adjoining other sewerage pumping stations, who advise that they also occasionally receive odours from those sites. [16] Mr Fitzpatrick has investigated sales of properties in other parts of Bribie Island and Caboolture City which adjoin pumping stations. He has been unable to ascertain any negative impacts in the sale prices to reflect a decline because of the odours, compared to parcels removed from the site. He notes one person in another part of Bribie Island, who lives 30 metres from a sewerage pumping station, but who did not complain of similar odours. However he has exercised his discretion in allowing any benefit of doubt in favour of the appellants on that matter. [17] Mrs Brown concedes that susceptibility to the odours may be different to different people, noting the current ill-health of Mr Brown. However Mr Fitzpatrick notes that the valuation of a parcel under the Act must be determined irrespective of the situation of any individual person as owner. Comparison of Sales - [18] Mrs Brown provides no additional sales evidence to support her estimate of the value, but agrees generally with Mr Fitzpatrick’s comparisons. Mr Fitzpatrick relies upon the following sales of vacant land: • Sale 1 – (8 Alpina Avenue, Banksia Beach – Lot 41 on RP 105652). This is a 546 m² Residential A parcel located about 140 metres north of the subject land across Sunderland Drive. This sale is nearer to noise from parkland at the corner of Avon Avenue and also Sunderland Drive. The sale would also be exposed to any similar odours from the pumping station, although there was no evidence at that property. The sale is seen as slightly inferior to the subject land. The sale sold in July 1999 for $50,500, was analysed after allowing for improvements at $48,500, and has been applied at $48,500. [19] • Sale 2 – (25 Hawaii Crescent, Banksia Beach – Lot 520 on RP 183312). This is a 600 m² Residential A parcel located about 200 metres south-west of the subject land. The sale sold in September 2001 for $55,000, and after allowing $7,000 for fill and $2,000 for fencing, was analysed and applied at $45,000 (or $52,000 on a site value basis). The sale is seen as superior to the subject land. [20] • Sale 3 – (29 Hawaii Crescent, Banksia Beach – Lot 522 on RP 183312). This is a 700 m² parcel located about 160 metres south-west of the subject land. The sale sold in September 1999 for $57,000, which after allowing $8,000 for fill and $2,000 for fencing, was analysed and applied at $47,000, or $55,000 on a site value basis. The sale is also seen as superior to the subject land. -- 5 of 10 -- 6 Mr Fitzpatrick sees the pathway down the western side of Sale 3 as not making any significant impact upon the sale price, as he sees such a pathway as an advantage to some owners or a disadvantage to others, depending upon their attitude to the public open space features. He argues that a purchaser purchasing such a lot was likely to see it as an advantage of further privacy from neighbours. However he concedes that privacy intrusion could also work the other way. Decision: [21] The only issue of dispute in this matter is really whether the respondent has allowed sufficiently for any irregular odours impacting the subject land from the sewerage pumping station. However, before concluding that matter, I look at the general level of relativity of values in the area. Relativity – [22] The matter of fair and equitable relativity between parcels has long been recognized by the Courts. That principle was followed in R and MM Barnwell v Valuer-General (1990- 91) 13 QLCR 13, where the Land Appeal Court said at page 16: “We are conscious that it is desirable that valuations made for the purposes of the Valuation of Land Act of comparable lands should bear proper relativity, one to the other, if the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis.” That was also followed in WM and TJ Fischer v Valuer-General (1983) 9 QLCR 44, at 46; and more recently in this Court in TF and SA Shepherdson v Valuer-General (1992- 93) 14 QLCR 83, where the learned Member said at page 87: “Applying to this case the principles of law summarised above, it is desirable that valuations of comparable lands should bear proper relativity. The appellants are entitled to rely on the valuations of properties in the vicinity of the subject land as being correct.” [24] If I look then at the current matter, I note that the market value of the land parcels in that locality, would reflect the value in the market place that each parcel would attract. Such values are referred to as the “site value” of the lands, and include any invisible improvements such as the filling of the parcel which has now merged with the land. However in determining the unimproved value of the lands as required under the Valuation of Land Act 1944, I note that s. 3(1) directs: -- 6 of 10 -- 7 “3.(1) For the purposes of this Act – ‘unimproved value’ of land means – (a) in relation to unimproved land, the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require; and (b) in relation to improved land, the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.” In respect of the meaning of “improvements” I note that is defined in s. 5(1) of the Act. [25] In the current matter the evidence is that the site values of the key comparators reveal that the subject land (Lot 171) is at the highest point in the local topography, has the advantage of a corner location, but reflects a site value of $49,000 compared to Lot 172 ($51,000) and the adjoining Lot 539 ($54,000). However the subject land (area 529 m²) is smaller than Lot 539 (area 600 m²). It is noted that Lot 539 has had an average filling allowance of $7,000 reflecting its current unimproved value of $47,000. The subject land and Lot 172 have had no filling of those sites. Those site values appear consistent. [26] In seeking guidance upon the market (or site) value of land, I note that was established by the High Court of Australia in Spencer v The Commonwealth of Australia (1907) 5 CLR 418, where Isaacs J (later CJ) said at page 441: “To arrive at the value of the land at that date, we have … to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as to the value of the property.” On the evidence supplied there is nothing to suggest that any of the purchasers of Mr Fitzpatrick’s sales were other than prudent purchasers, who would have been aware of the circumstances in that area. -- 7 of 10 -- 8 Comparison of sales – [27] The comparison with sales of vacant land as adopted by Mr Fitzpatrick has also been held as the preferred method of determining unimproved value. That principle was followed in Hans and Else Grahn v The Valuer-General (1992-93) 14 QLCR 327, where the Land Appeal Court rejected comparisons of residential lots on a rate per square metre basis, and said at page 330: “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. As the Land Appeal Court said in its decision on the appellants’ previous appeal (H and E Grahn v. The Valuer-General, AV89-246 and 247, 13 December 1990): ‘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 valued 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.’” [28] That principle was also supported in TJ Fischer v Valuer-General (supra) where the Land Appeal Court said at page 46: “It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels.” That was also followed by the Land Appeal Court in PH Clough v Valuer-General (1981- 82) 8 QLCR 70, at 76. [29] In the current matter the appellants do not contest Mr Fitzpatrick’s comparisons of his Sales 1 to 3 as follows: Sale Area Analysed site value Comparison 1 546 m² $48,500 Slightly inferior 2 600 m² $52,000 Superior 3 700 m² $55,000 Superior Subject land 529 m² $49,000 - There is nothing in those comparisons to discredit Mr Fitzpatrick’s analysis of the subject land. -- 8 of 10 -- 9 The Impact of Sewerage Odours - [30] While Mr Fitzpatrick has no personally experience of the frequency or intensity of the suggested odours from the sewerage pumping station, he has sought comparisons elsewhere in similar circumstances. His research has proved fruitless, and he is left with the repeated concerns of the appellant in their personal environment. The evidence is that, while the odours are offensive, they are spasmodic and infrequent. There are also no other complaints to the respondent in that area of a similar nature, and Mr Fitzpatrick must rely upon the appellants’ concern. The Council has not yet officially recognized the problem. [31] In order to allow for any benefit of doubt in favour of the appellants, Mr Fitzpatrick has sought guidance in the matter of Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Limited & Ors (1946-47) 74 CLR 358, where in the High Court Dixon J said at page373: “I have had the advantage of reading the judgment prepared by Williams J. and agree in it. I should like, however, to add for myself that there is some difference of purpose in valuing property for revenue cases and in compensation cases. In the second the purpose is to ensure that the person to be compensated is given a full money equivalent of his loss, while in the first it is to ascertain what money value is plainly contained in the asset so as to afford a proper measure of liability to tax. While this difference cannot change the test of value, it is not without effect upon a court’s attitude in the application of the test. In a case of compensation doubts are resolved in favour of a more liberal estimate, in a revenue case, of a more conservative estimate.” [32] In the current matter Mr Fitzpatrick has allowed, following the objection by the appellant, for an amount of $2,000 specifically for potential impact of offensive odours. Now the appellants argue that $2,000 is insufficient, and that the value of the land should return to the level when the sewerage pumping station was constructed about five years ago. However Mrs Brown agrees that the offensive odours are only of a more recent occurrence. On that basis any correlation with a previous unimproved value could only relate to a period of about two to three years ago. But I have no evidence what had been the former unimproved value at that time. [33] In respect of supporting the appellants’ estimate of the unimproved value of the subject land, I am reminded that in lodging an appeal to this Court the appellants carry the onerous task of establishing their case. Indeed in respect of the notice of appeal s. 45(4) of the Valuation of Land Act 1944 states: -- 9 of 10 -- 10 “45.(4) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner.” [34] Precedents in the courts also establish that the onus to prove their case rests upon the appellants demonstrating that the Chief Executive has made an error of principle or fact. That was clarified by the High Court of Australia in Brisbane City Council v The Valuer- General (1977-78) 140 CLR 41, per Gibbs J at pages 56 and 57: “In my opinion once it is shown that in making the valuation the Valuer- General acted upon a wrong principle, or made a serious error of fact, the presumption created by section 13(7) is rebutted.” … The effect of these provisions is that an owner on appeal to the Land Appeal Court has the burden of proving the grounds of his appeal, but not the burden of proving that the amount which in his opinion should be the valuation is correct. Obviously the court, if it allows an appeal, may determine the valuation at an amount different from that for which the owner contends.” (Section 13(7) as it then was is now section 33, which states that a valuation is deemed to be correct unless proved to the contrary.) In the circumstances of this matter, in the absence of evidence to the contrary, I believe Mr Fitzpatrick has made an appropriate allowance for the stated offensive smells. Conclusions: [35] Having considered the whole of the evidence I am not persuaded that the appellants have proved their case. The appeal is dismissed, and the unimproved value of Lot 171 on RP 105652 as determined by the Chief Executive in the sum of Forty-nine Thousand Dollars ($49,000) is affirmed. NG DIVETT MEMBER OF THE LAND COURT -- 10 of 10 --