Bayliss v Chief Executive, Department of Natural Resources [1998] QLC 43

LAND COURT BRISBANE 17 April 1998 Re: Appeal against Annual Valuation - Valuation of Land Act 1944 - Local Government: GCCC-Albert - (AV97-151). Mark G Bayliss v. Chief Executive, Department of Natural Resources (Hearing at Coolangatta) D E C I S I O N Background: This matter relates to a property at Beechmont Road, Lower Beechmont, and described as Lot 81 on RP 92742, Parish of Gilston. The land is located on the south-eastern side of Beechmont Road about 19 kms south-west of the Nerang Business Centre. The subject has an area of 782 square metres, and is zoned as "Rural" under the Town Planning Scheme of the Gold Coast City Council of 24 February 1995, and effective at the date of valuation of 1 October 1996. The key issues are the nature of the land, the impact of slippage, relativity, and comparison of sales. Access to the subject is via a public pathway to the south-east, with access at the frontage to Beechmont Road restricted because of the nature of the land. Electricity and telephone are available. Because of the location of the dual laned bitumen sealed Beechmont Road along a narrow ridge, vehicle access to the front of the subject would be difficult. The area is also unstable and subject to slippage. However, there are good views of the Hinze Dam and towards the Surfers Paradise coastline from the subject. The Chief Executive, Department of Natural Resources, issued a valuation of the subject on 10 March 1997 for $5,000. Following an objection the Chief Executive confirmed that figure on 2 July 1997. The appellant has appealed that figure claiming the valuation should more properly be $15,000. Mr MG Bayliss appeared and gave evidence on his own behalf. Mr PD Grennan appeared for the respondent, calling evidence from Mr AB Van Hees, the Departmental Registered Valuer, who now accepts responsibility for the valuation. The original valuer was [1998] QLC 43 -- 1 of 10 -- 2 no longer available to defend the valuation. The Evidence: (1) The nature of the land - Mr Bayliss agrees that the area of the subject is subject to instability, and has been the subject of a major report (the Willmott Report, 1983). He also agrees that the entire estate surrounding the subject is subject to slippage. However he claims that the current valuation has over-emphasized the broad nature of that instability, concluding that the land is unsuitable for any residential building purpose. He disagrees with evidence that dwelling foundations would need to extend to bedrock, or that waste water disposal upon the site would create an enhanced problem for stability of the building. He claims that, subject to acceptable engineering design, a "pole house" type of structure could be underpinned into the large floating boulders which are known to exist in the area. However, the appellant provided no factual evidence to support his assertions of this technical capacity. Mr Bayliss provided claims of discussions with a builder on this matter and acknowledged that confirmation of those techniques on the subject would need expensive investigations. A figure of $10,000 to $15,000 was suggested as necessary to properly document the capacity of such building upon the land. However, the appellant appeared to rely on opinions rather than personally having the matter fully investigated. He did not appear to understand that, in a matter of this nature, the onus falls to the claimant to justify their conclusions where there is a reasonable level of doubt about the nature of the land. Mr Bayliss had discussed the matter with an engineer of the Gold Coast City Council (the Council), and indicated that there was some possible understanding of an alternative building structure. However again he did not provide evidence that the Council officer was prepared to consider the matter further. He had also discussed the matter of using waste water storage tanks, and the removal of the waste by approved carriers, presumably with some interest being shown, but again not substantiated. Mr Bayliss confirmed that when he purchased the land he was aware of its disabilities, but he continues to believe that they are not insurmountable. He had obtained that information from discussions with the previous owner of the land, and also with Council officers. In considering the views from the land it was agreed that the more expansive views were to be had from the area fronting Beechmont Road. However even from a small flatter possible building area near the pathway to the south-eastern part of the subject, there are still views over the lake or the dam. Mr Van Hees measured the land and described it as falling about 8 metres from the road pavement to the front boundary, then falling at 25 degrees to the centre of the lot, and flattening to a gentle fall to the southern boundary (the rear). He described the area as having been -- 2 of 10 -- 3 subject to extensive land slippage during the 1974 flood rains, and geological studies of the area indicated potential landslip danger for slopes in excess of 15 degrees gradient. He suggests the subject has an overall fall of 18 degrees from the road pavement to the rear. Because of these constraints, Mr Van Hees saw its highest and best use as vacant grazing land. (2) Instability in the Area - Both parties agree that guidelines for the Council have been provided following a report "Slope Stability and its Constraints on Closer Settlement in the Canungra-Beechmont-Numinbah Area, South East Queensland", November 1983, by WF Willmott. That technical report identified areas of stability and stability zoning (Exhibit 7) and designated areas as: •C2 - subject to some multiple rotational sliding in gully mouths and concave areas above bench edges - suitable for broadacreage subdivision, and •D2 - subject to multiple (extensive) rotational slides and earth flows on edges of benches - generally unsuitable for subdivision, and • E - steep to very steep slopes and cliff lines on sides of plateau and ranges - unsuitable for subdivision or building. Note: It was noted that suitability was determined from topography and stability alone. When commenting upon certain areas designated in the "Willmott Report" as C2/D2 or D2/C2 zones, the report states: "Suitability: Because of the extensive areas of instability, this zone is considered unsuitable for most forms of closer subdivision. A few stable building sites may be present on isolated knobs, but access and provision of services to such areas across unstable areas would preclude usual patterns of subdivision. " While the mapping in the report was small scale, a later review by Consulting Engineers Coffey Partners International Pty Ltd, on 2 October 1990, advised "that the steep area on lot 81 could be the back scarp of a large landslide". That letter also advised that Lot 81 was included close to the zone of either D2 or E, in the 1983 study by the Geological Survey of Queensland (the Willmott Report). The Coffey letter went on to advise the former owner of the subject, who commissioned the advice (Mrs Brown), that initially a study should be undertaken of the stability at a likely cost of $10,000 to $15,000. However the advice concluded "that there is no `guarantee' even after this work that the site would be found to be at a low risk of landsliding, or that a foundation could be designed or economically constructed that would lower the risk of landslide damage to a house built on Lot 81". -- 3 of 10 -- 4 (3) Advice from Council - As a consequence of public concern about landslip problems in the area, during 1990 to 1991 the Council introduced guidelines on the areas of known instability, based upon the Willmott Report. Mr Bayliss argues that these Council guidelines are intended to limit construction in unstable areas, not to prevent it. He is aware of Council's concerns to avoid indemnity claims against the Council where a building approval has been given, which subsequently results in later damages as a consequence of predictable slippage upon the subject. However, he also claims that there was an ability to "disclaim the Council from liability", subject to a specific design and construction of pier foundations. Mr Bayliss agrees that concrete slab construction would be inappropriate but, in his view, a pole house could be suitable. However, in these matters he provided no evidence to support his claim. Mr Grennan gave evidence of correspondence between the former owner of the land (Mrs Brown) and the Council in respect of an application to build. Mrs Brown claimed that when she purchased the land in August 1990 for $25,000, she had her solicitors undertake searches of information from the Council as a normal part of the transaction. She asserted that, in spite of knowledge of potential slippage in the area (the Willmott Report), Council had provided no indication of potential problems. The application to build was refused on 23 May 1991, and Mrs Brown later sought to sell the land to the Council for recreational purposes, in view of her inability to use the land. Council declined her offer by letter of 3 January 1996. Mr Bayliss believes that Mrs Brown's application was refused because of inadequate building footings and not merely because of its location. Previous to these negotiations with Council, Mrs Brown had sought assistance from the former Minister for Local Government in November 1991, who advised of his inability to assist in the matter due to any lack of regulatory controls at the time of the original subdivision of the land in 1959. However, the Minister went on to indicate that the Council was not aware of the potential slippage problems at the time of Mrs Brown's purchase of the land in 1990. He also confirmed the need for caution to be exercised by Council in these matters, but also for the individual owner to seek his own geotechnical advice prior to purchase. However in the event of any possible administrative mishandling by the Council, Mrs Brown was advised to direct her complaints to the Parliamentary Commissioner for Administrative Investigations (the Ombudsman). Verbal advice from the Ombudsman's office revealed that he was unable to assist without written advice from the Council that the land was unsuitable on which to build. Mr Bayliss purchased the subject from Mrs Brown in January 1997 for $5,500, in full knowledge of the above proceedings. He believes she was an anxious vendor who was desperate to sell, and for that reason he challenges that the sale of the subject was a fair estimate of value. -- 4 of 10 -- 5 (4) Relativity - Mr Bayliss claims that valuations of all parcels fronting Beechmont Road (Lots 79 to 90) should show a consistent value as they are all impacted by the same potential for slippage. He notes that currently Lot 79 ($21,500) and Lot 86 ($15,000) differ from the others, which each are valued at $5,000. He also notes that the lower, and less steep lots, fronting Tarlington Road to the south-east, each have higher values at approximately $25,500. On this basis he challenges the value of Lots 79 and 86. Mr Van Hees disagrees with that conclusion arguing that Lot 79 is a corner site, is less steep and therefore more useable, and has more accessible road frontage than the subject. He concedes that he has not made any allowance on Lot 79 for the discharging of a drain onto the parcel, but felt that would be a matter for future consideration. Mr Van Hees also confirmed that he had considered all the lots backing onto the pathway as having access from that pathway, even though physical access was only by rough road-based material currently covered by long grass. However, a major difference in the values was because of access to Beechmont Road for Lots 79 and 86. Mr Van Hees based his opinions upon discussions with Mr B Wells, a long-term resident (16 years) who was familiar with the area. Mr Van Hees advises that the reason for the higher valuations on Lots 95 to 103 fronting Tarlington Road to the south-east, was because of an existing residence on Lot 101 which was assumed by the valuer to have been given Council building approval. There was subsequent inconclusive argument by the parties as to whether Council was about to issue a notice to demolish that dwelling, because of a failure to obtain formal Council approval. Mr Bayliss disagrees with that assertion claiming that during construction of the dwelling on Lot 101, the owners had needed to resort to media coverage to persuade Council to allow the building to be completed. Mr Bayliss believes the notice to demolish a building relates to Lot 130, which he claims, is currently under contract of sale subject to that notice. Mr Bayliss was also aware of another lot in the D2 Zone of stability which had been approved subject to an additional $10,000 of costs. However, Mr Bayliss conceded that there was currently no person residing on any of the lots between Beechmont Road and Tarlington Road, other than Lot 101. There is a disused caravan located on Lot 86 on a small building area excavated on top of a small knoll. (5) Comparison of Sales - Mr Bayliss sought support from a sale of Lot 88 for $40,000 on 10 September 1996. However an analysis of that sale showed it to be not an "arms length" transaction as it was a family sale. He also argues that the sale of Lot 86 for $15,000 on 1 April 1995, supports his argument for an increase in the valuation. Mr Van Hees accepts that sale, but argues that the -- 5 of 10 -- 6 better access to Lot 86 from Beechmont Road is the reason for the current difference in the valuations. Mr Van Hees uses the sale of the subject (Lot 81) at $5,500 on 1 January 1997 as the primary basis for comparison. He argues that the following sales were all to ill-informed purchasers which do not reflect the requirements of a bona fide "arms-length" transaction: Lot Date Price Lot 79 November 1985 $16,000 Lot 80 November 1991 $22,000 Lot 82 January 1993 $18,526 Lot 83 January 1992 $23,950 Lot 84 August 1990 $24,000 Lot 85 April 1990 $19,950 Lot 86 April 1995 $18,000 Lot 89 December 1996 $40,000 Lot 90 June 1990 $25,000 Mr Van Hees also noted that the Council had purchased Lot 131 for $529 on 24 February 1997. Mr Bayliss offered that Council had also purchased Lot 100 for $15000 on 14 September 1994. Decision: This matter has some difference from normal valuation matters in that the appellant argues that the Chief Executive has made too much allowance for the disabilities of the site. He argues that when interpreting the Council policy in respect of the known instability of the subject area, the Chief Executive has wrongfully concluded that the Council would not approve any building on the land. His argument is that, subject to adequate technical advice, the Council may well approve a building which demonstrates a solution to the difficult building needs occasioned by the instability of the land. Mr Grennan in his conclusion does not resile from that observation and agrees that there is possibly some doubt about whether Council would agree to any building development. However, Mr Grennan argues that the onus to approve any suitable technical solution to the Council rests upon the owner of the land. (i)The Nature of the Land - In considering the nature of the land I accept Mr Van Hees' description of the land, and note that, with the exception of Lot 79 and 86, all parcels from Lot 80 to Lot 90 are unlikely to be afforded physical access to Beechmont Road because of the difficult nature of the terrain. (ii) Instability - -- 6 of 10 -- 7 In the nature of the instability of the land I accept the technical advice of the Willmott Report, and the interpretation of that report by Coffey Partners International Pty Ltd. There is no doubt that the geophysical underlay of the land is such that surface subsidence is a very real potential danger. Recent evidence of the impact of land slips, both in southern states and overseas, demonstrates the need for caution in these matters. It would be an imprudent person who did not weigh those matters carefully before proceeding to build upon the land. Further, in comparing Lot 79 with the subject, I also note the comments from Coffey Partners International Pty Ltd which said: "To the east of lot 81, on lot 79, there is a recent rotational landslide scar. This landslide is thought to have come down during the heavy rains of 1974. Our 1982 studies indicated deep seated landslide features in the flatter areas some 100m to 200m to the south west of lot 81, indicating that the steep area on lot 81 could be the back scarp of a large landslide. " On that evidence there would not appear to be any significant difference between the two parcels based upon instability alone. (iii) Relativity - That leads to the matter of relativity, and I note that all parcels fronting Beechmont Road have similar values ($5,000), except Lots 79 ($21,500) and 86 ($15,000). Mr Van Hees values the difference between those two parcels as reflecting the better access to Beechmont Road, and the better potential housing sites. If I am to conclude that there is doubt about any likely application to build upon any of the parcels in that area, the better access for building would appear to add little additional value to either Lots 79 or 86. On that basis I can understand Mr Bayliss's concerns that the values of those two parcels appear inconsistent. However, the purpose of this matter is to examine the valuation of the subject, and not to challenge the relative values of Lot 79 and 86. That was found in R and MM Barnwell v. The Valuer-General (1989) 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. " The principle was further clarified in TF and SA Shepherdson v. The Valuer-General (1992-93) 14 QLCR 83 at page 86: "If possible, the Valuer-General should obtain uniformity between different blocks in the same land category or type, but should do so (preferably by reference to sales of comparable land) by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error. " -- 7 of 10 -- 8 That decision also relied upon the findings of Ladies' Hosiery and Underwear Limited v. West Middlesex Assessment Committee (1932) 2 KB 679, All.ER 427, (CA), where Scrutton L.J. said at page 688: "That the assessing authority should not sacrifice correctness to ensure uniformity but, if possible, obtain uniformity by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error. " The thrust of those precedents is that it is not appropriate to admit evidence that would cast doubt upon the accuracy of valuations of comparable neighbouring properties. Shepherdson v. The Valuer-General. Based upon the evidence before me I find nothing to suggest that the current relativity of the subject with adjoining parcels is inappropriate. (iv) Sales - In examining the evidence of sales, I reject the sale of Lot 88 as a special family sale as I find it does not meet the criterion established for a bona fide sale in Spencer v. The Commonwealth of Australia (1907) 5 CLR 418. With a sale to a family member there are grounds to treat that sale with considerable caution, as the sale may include certain other considerations not inherent in an "arms length" transaction. ("Land Valuation and Compensation in Australia", by Rost & Collins, 2nd Edition, page 87). That leaves the two sales for comparison being the sale of the subject for $5,500, and the sale of Lot 86 at $15,000. There is no challenge of the sale of Lot 86, and only the estimated allowance ($10,000) for the better access separates the parties. In the matter of the sale of the subject, I find that to be strong evidence of the value of the subject, unless there were grounds to exclude the sale as not an "arms length" transaction. That may have occurred for want of other circumstances, such as the ill health of Mrs Brown, or because her family had already moved overseas. However, Mrs Brown had unsuccessfully sought to sell the subject to the Council for $5,000 in 1995, having originally paid $25,000 in 1990. She had the parcel on the market for nine months, and finally accepted $5,500 in January of 1997. While I can accept that she was by then somewhat traumatised by the difficulties she had experienced in trying to use the land, the circumstances of the then known physical limitations on the land suggest that the market value of the land was probably about $5,000. In the end she accepted $5,500, which I accept as a bona fide sale bearing in mind the known difficulties. (v)The Advice of Council - Finally I come to the matter of the reliance by the former owner, Mrs Brown, upon advice from the Council about what should have been known about the instability of the subject area. It would seem unusual for the Council to have not been aware of the existence of the -- 8 of 10 -- 9 Willmott Report and its findings about the Lower Beechmont area. From the evidence there would appear to have been considerable media coverage since the 1974 flood rains, and the publication of the 1983 report. That raises the issue as to whether Mrs Brown should have been able to rely upon the Council to have exercised its statutory powers so as to avoid harm occurring to her as a consequence of the general knowledge of the Willmott Report's findings. The concept of "general reliance" was raised as a matter of a duty of care owed by a public authority in Sutherland Shire Council v. Heyman (1985) 157 CLR 424, by Mason J., which was questioned by the High Court in Pyreness Shire Council v. Day, 23 January 1998, to be reported. In the latter matter the High Court as a majority decision rejected "general reliance" as a basis of liability, and Brennan C.J. noted that: "The test seems to invite consideration of a general expectation of the exercise of a statutory power rather than an expectation referable to particular circumstances which might invite consideration of an exercise of the power. If community expectation that a statutory power will be exercised were to be adopted as a criterion of a duty to exercise the power, it would displace the criterion of legislative intention. " However in that matter the High Court, by majority decision, found that the Council owed a duty of care to exercise its powers to compel the repairs of a faulty fireplace. Failure to exercise that power in the circumstances meant that it was liable for damages. The issue of vulnerability was also considered and, where a party had no direct opportunity to effect an outcome, he was seen to have a right to rely upon the Council to act properly in their interests. Where a party which has opportunity to influence the matter was involved, then responsibility lies with them for their actions. In seeking to interpret those findings in the current matter, it would seem that the general responsibility to have informed Mrs Brown of the possibility of land slip, when she made enquiries of the Council in 1990, should not be seen as a Council liability, as there was no evidence that it had acted negligently at the time. However it has been held that, as a general rule, the principles of law of negligence apply also to public authorities where they failed to act or are negligent in exercising a power in the public interest. Sutherland v. Heyman supra, page 424. The Heyman matter involved the subsidence of a dwelling caused by inadequate footings, following approval of a building permit. The claim was that the Council had failed to exercise its powers effectively by not properly inspecting the foundations. That has a direct analogy with the current matter which, had the Council issued a building permit and the building subsequently subsided, there would have been some liability upon the Council. -- 9 of 10 -- 10 However there was no direct evidence that Council was fully aware of the Willmott Report findings, and immediately it was so informed, it then put certain policy guidelines in place. Although the Willmott Report was available in 1983, the failure to advise Mrs Brown of its warnings in 1990, may not have been an oversight or negligence. It may merely have been that Council was in fact not aware of the facts at that time. Summary: The evidence supports that the current valuation has not been discredited by the appellant. In this regard I note that the onus is upon the appellant to prove his case under section 45(4) of the Valuation of Land Act which says in respect of an appeal to this Court: "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. " I note also that under section 33 of the Act every valuation is correct unless proved to the contrary. In this matter Mr Bayliss has failed to substantiate his claims. Conclusion: Having considered the whole of the evidence, I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the valuation of the Chief Executive of Lot 81 on RP 92742 is confirmed at $5,000. (NG Divett) Member of the Land Court -- 10 of 10 --