Close (as trustees for Implicit Trust) v Chief Executive, Department of Natural Resources [2000] QLC 46

LAND COURT, BRISBANE 31 July 2000 Re: Appeal against Annual Valuation - Valuation of Land Act 1944 - City of Brisbane - Division of Moggill. (AV99-527). Wallace R and Beverley F Close (as trustees for Implicit Trust) v. Chief Executive, Department of Natural Resources D E C I S I O N Mr and Mrs Close, as trustees for Implicit Trust, are the owners of a residential property situated at 85 Jilba Street, Indooroopilly. Under the provisions of the Valuation of Land Act 1944 (the Act), the respondent determined the unimproved value of that land at $88,000. The owners objected against that valuation and succeeded in having the unimproved value reduced to $80,000. The owners then appealed to the Land Court, advising that their estimate of the unimproved value was $50,000. The grounds of the appeal were stated as follows: "The presence of a troublesome, high-flow rising sewerage main 110 metres, the length of my property. Maintenance of it ruined my houseyard and its presence has permanently devalued my property because of backups, gas leaks, etc. I have photos to show the damage and inconvenience." The land is described as Lot 90 on Registered Plan 23651, Parish of Indooroopilly, containing an area of 1816 square metres. It is situated approximately 1.8kms south-west of Indooroopilly Westfield Shopping Town. Jilba Street has a full width bitumen sealed carriageway, with concrete kerbing and guttering and grassed footpaths. It is zoned "Residential A" under the City of Brisbane Town Planning Scheme and has the usual city services available. It is developed with a single unit residential dwelling. Mr WR Close appeared and gave evidence for the owners, while Mr U Singh, a registered valuer employed by the Department of Natural Resources, appeared and gave evidence on behalf of the respondent. [2000] QLC 46 -- 1 of 5 -- 2 The only real issue in this case concerns the presence and effect of an underground 150mm sewerage main which runs the full length of the south-west boundary of the property. The allotment could best be described as having the shape of an elongated, irregular rectangle. It was described by Mr Singh as being of medium elevation, with a moderate fall from the road towards the north-west and north. He said that the land falls approximately 20 metres over a distance of 90 metres. The contour plan indicates that the subject allotment was the lowest in the vicinity and in its natural state was probably a gully. Mr Close said that the lower parts of the land had been filled. The house is situated close to the Jilba Street frontage. The house was constructed before sewerage became available and at that time relied upon a septic system. A gravity sewerage main was constructed through the property in the 1970s, running almost the whole length of the south-west boundary. That gravity main is connected to a rising main coming from the south, the connection being on the Jilba Street footpath, just outside the south-western corner of the property, where a large concrete inspection pit is located. At regular distances along the sewerage line on the subject property are four inspection holes (one lamp hole and three manholes). The sewerage main runs very close to the southern corner of the residence, with the lamp hole located nearby. Mr Close gave evidence that the owners purchased the property in 1980 for what they thought was a very good price. However, they were not aware of the sewerage main running the full length of the boundary, as it was overgrown at the time. If they had known about its existence, they may not have considered it to be such a good purchase, because of the problems which have been associated with the sewerage main. As Mr Close put it, it has encroached on their quality of life. Mr Close explained that all the sewage from the Fig Tree Pocket area is pumped through the rising main to near his property boundary, where it joins the gravity main. It then flows by force of gravity through that main along the length of the subject land. The owners first became aware that there was a problem within a year of purchasing the property, when sewer gas escaped out of the lamp hole adjacent to their children's bedroom. Mr Close explained that if the covers of the inspection holes are not replaced properly, gas in the pipe builds up pressure and takes the path of least -- 2 of 5 -- 3 resistance. That happened frequently during their early years of ownership. He went on to say that if solid material gets through the pump, such as drink bottles, it lodges in the roots and causes sewage to back up. When that happens, sewage escapes through the pipe connecting the house to the main, overflowing onto the subject land. Mr Close explained that there have been problems with the maintenance of the sewerage main. He described how Council workmen dug a trench 5 metres long, 3 metres wide, 3 metres deep in his backyard, trying to locate a sewage back-up problem. It proved to be the wrong part of the main. What seemed to be Mr Close's major concern was that within the next five years he thought that the whole of the sewerage main would have to be torn up and replaced. He described that as a potentially catastrophic event. He felt that it would be so uncomfortable they would have to vacate the house while the work was being carried out. He felt that any informed potential purchaser would be aware that he or she was facing such a problem and would adjust the purchase price accordingly. Mr Close hopes to overcome a major part of the present problem by having a new connection installed between the house and the sewerage main, some 15 feet downhill from the present connection point. He hopes that the new connection will prevent the problem resulting from the backup of sewage, because the present connection does not have sufficient fall. Mr Singh gave evidence that he valued the subject land by comparison with sales of the general locality. While the sales were by no means identical to the subject land, he felt that they had sufficient features in common to provide him with a reliable basis for the valuation. While Mr Singh had known of the presence of the sewerage line, he was not initially aware of the number of inspection holes on the allotment, nor the problems which had resulted. He said that if it had not been for the presence for the sewerage main he would have valued the subject land at $90,000. However, to acknowledge the presence of the sewerage main he had valued the property at $88,000. Mr Singh reasoned that he had to value the subject land in its unimproved state and if it was unimproved, any house built on that land could be located further away from the sewerage main. Mr Singh had investigated the sales of properties on which were situated sewerage mains and compared them with sales of properties without mains. He found -- 3 of 5 -- 4 that purchasers of such properties seemed to make little difference for the existence of sewerage mains. However, he admitted that the sales he investigated were in newer areas and were not really comparable with the older sewerage main on the subject land. Following the objection to the valuation by the owners, Mr Singh made a more detailed inspection of the property. Mr Close explained the problems that had occurred. As a result, Mr Singh concluded that further allowance should be made in the unimproved value and he reduced the valuation to $80,000. Since then, Mr Singh has made enquiries of the Council. He received a letter dated 9 March 2000, which confirmed that there had been operational problems in the past, with three blockages since 1998. Those blockages may have led to sewage being discharged from a maintenance hole or a disconnector trap. After hearing the evidence from Mr Close, Mr Singh conceded that the valuation could be reduced to $75,000 to take into account all the problems caused by the sewerage main on the subject land. Clearly, the subject land suffers from a disability having the gravity sewerage main with four inspection holes located along its south-western boundary. Even if there were no problems with escaping gas or sewage, the fact that the Council officers would need to periodically maintain the line would mean there would be disturbance or threat of disturbance to the owners' quiet enjoyment of that property. There is little doubt that the fact that the house had been sited on the land before the main was laid had exacerbated the problems which have occurred. Mr Close and Mr Singh seemed to be in agreement that the house could have been located in a more advantageous position to the sewerage main. It also seems that the existing connection from the house to the main has been the cause of at least some of the problems. There seems to be agreement that with the completion of the new connection some 15 feet further down the main, those problems will be eliminated. The sales used by Mr Singh indicate that if there was no sewerage main problem on the land it would have been appropriately valued at $90,000. The allotment to the south, which is higher, is valued at $96,000. The allotment to the north, which is on approximately the same level as the subject land, is valued at $90,000. The question in this case is how much less would a prudent purchaser have paid for this land in its unimproved state, because of the existence of the sewerage -- 4 of 5 -- 5 main? There was no sales evidence tendered in this regard, however Mr Singh said that his investigations indicated that a prudent purchaser would pay little less because of the existence of a sewerage main. Mr Close's main concern was with regard to the digging up and replacement of the sewerage main within the next five years. Mr Singh regarded that as too hypothetical to warrant any reduction in valuation. I agree with Mr Singh. If such a catastrophe as Mr Close anticipates does happen, then appropriate adjustments can be made to the valuation at that time. As at the date of this valuation, 1 October 1998, there was no evidence that replacement of the sewerage main was imminent. After having considered all the evidence in this case, I have come to the conclusion that Mr Singh's concession that the valuation could be reduced to $75,000 is appropriate. That would make an allowance of $15,000 for the existence of the sewerage main. In the circumstances, I do not feel that any further adjustment to the valuation should be made. Accordingly, the appeal is allowed, the valuation of the respondent is set aside and the unimproved value of the subject land as at 1 October 1998 is determined at Seventy-five thousand dollars ($75,000). JJ Trickett President of the Land Court -- 5 of 5 --