Cox v Chief Executive, Department of Natural Resources [1998] QLC 11

LAND COURT BRISBANE 11 FEBRUARY 1998 Re: Appeal against annual valuation Valuation of Land Act 1944 Valuation Roll No.: 200/3884 Local Government: Toowoomba City Council AV97-166 Dr John W and Anne C Cox v. Chief Executive, Department of Natural Resources (Hearing at Toowoomba) D E C I S I O N Background: This matter relates to a property located at 26 Rifle Range Road, Mt Lofty, Toowoomba, and described as Lot 2 on RP 190453 and Lot 3 on RP 202656, Parish of Drayton. The parcel has an area of 1.593 ha and is located about 3 km radially north-east of the Toowoomba Post Office. The key issues are access to the subject, the provision of services, proximity to microwave transmission towers, the nature of the land, relativity and comparison of sales. The land is zoned as "Residential C" under the Town Planning Scheme of the Toowoomba City Council of 10 June 1989, and effective at the date of valuation of 1 October 1996. Access to the property is via a privately constructed bitumen sealed road, and thence by Rifle Range Road which is also bitumen sealed. Electricity, telephone, town water and sewerage are all connected to the subject. The land is located on the upper slopes of Mt Lofty and comprises gently to steeply sloping former scrub country. There are extensive panoramic views of the range towards the north. The land is within the Development Control Plan No. 3, Escarpment, and it has been valued under s.17 of the Valuation of Land Act as a single unit dwelling homesite. On 1 April 1997 the Chief Executive, Department of Natural Resources, issued a valuation of the subject at $147,000. Following an objection, the Chief Executive confirmed that figure on 1 July 1997. The appellants have now appealed that decision, claiming the valuation should more properly be $100,000. [1998] QLC 11 -- 1 of 11 -- 2 Dr JW Cox appeared and gave evidence for the appellants. Mr BM Tannock appeared for the respondent, calling evidence from Mr SJ Doyle, the departmental registered valuer responsible for determining the valuation. Evidence: The appellants argue that the valuation is excessive on the following grounds:  access to the property is via a private road which must be maintained by the appellants;  the cost of providing sewerage was borne by the appellants;  proximity to nearby television towers creates a possible health hazard;  approximately one-third of the property is uninhabitable. Access to the Property: Dr Cox argues that while access to the subject is shown by the respondent as good, that only occurs as a result of a privately constructed driveway, off the dedicated Rifle Range Road, which serves several properties in that area. He provided evidence of correspondence with the Toowoomba City Council confirming the nature of that driveway. The driveway is located upon Crown Reserve, but was constructed by the subdivider of the land, and is maintained by the residents who enjoy the vehicle access. The driveway provides access also for the adjoining lots to the south-west, Lots 9 and 10 on RP 166175. Dr Cox advised that it had cost the appellants $13,000 to construct the driveway from the sealed pavement on Rifle Range Road to the subject, a cost he believes should be allowed for in the valuation. Maintenance of the driveway has already been major as a result of slippage in the area. In response, Mr Tannock argues that, while the private nature of the driveway is acknowledged, access to the subject is also readily available at the northern corner of Lot 3 on RP 202656. Dr Cox challenges the feasibility of that access point, as he also owns the adjoining Lot 1 on RP 151923, which is rented to a tenant. He has already moved the brick fence in that area to further widen access for a four-wheel drive vehicle at that point. However, physical access is still somewhat restricted by trees and a power pole. Dr Cox, however, agrees that only the construction of earthworks currently prevents physical access at that point. There would be no need for further subdivision to gain legal access at the northern corner of the subject. The Provision of Sewerage: Dr Cox also notes that in comparing sales of comparable lots, all have sewerage available. In the matter of the subject, this had to be provided by the appellants at their cost as part of the subdivisional requirements of Council. In order to understand the history of -- 2 of 11 -- 3 the subject, it is necessary to consider the chronology of developments. Initially the subject was part of the area owned by the former Mayor of Toowoomba (Anderson), as Lot 11 on RP 166175. The Mayor lived on the adjoining Lot 10. He subdivided Lot 11 about 1982-83 into Lots 1 and 2 on RP 190453. Lot 1 was then further subdivided into Lots 1 and 3 on RP 202656. The appellants initially acquired Lot 2 on RP 190453 to erect their dwelling, then later acquired the additional Lot 3 on RP 202656. The adjoining Lot 1 on RP 202656 (8,888 m²) is flat and is owned by a local dentist (Brilliant). When the appellants sought approval for the subdivision of Lot 3, conditions of approval included construction of the sewer branch line to Lot 2 and the provision of the driveway previously mentioned. The appellants had to pay for the construction of 300 metres of sewer line, and for disturbance when passing through Lot 1 on RP 194152 (Paterson), in order to get access to the sewer mains in Rifle Range Road. The sewer line extended to a manhole within Lot 2 on RP 190453, as the appellants did not own the new parcel, Lot 3, being subdivided at that time. As a consequence, the majority of the costs associated with the construction of the sewer line were external to the then Lot 2 on RP 190453. The total cost of $12,000 for the sewer pipe, included an unspecified amount for compensation paid to the Patersons. In respect of whether the appellants have responsibility for future maintenance of the sewer line, Mr Tannock argues that, as the sewer pipe is now owned by the Council as part of the services infrastructure for the area, and as Council insists it has authority to authorise any future connections to that pipeline, then maintenance of the pipe external to the subject would be the responsibility of others. He further argues that, as the sewer line was a condition of approval of the subdivision, the appellants were required to maintain the pipe, like all developers, for one year after construction. After that period, the Council assumed responsibility for maintenance. Mr Doyle has valued the subject as one parcel under s. 34(1)(a) of the Valuation of Land Act. The cost of the sewer line within the subject were part of the costs of obtaining the new lots, and while actually providing two sewered lots (Lots 2 and 3), was considered as providing a single sewered parcel for comparison in the market. As a result, Mr Doyle has not made any allowance deduction for these costs in determining the unimproved value. Proximity to the Television Towers: Dr Cox confirmed that the WIN television transmitting tower is located about 250 metres in direct line of sight south-east of the subject. While there are currently three large -- 3 of 11 -- 4 trees partly obstructing any radiation from the tower, the television proprietors, for safety reasons, are seeking approval to remove at least one of those trees which is seen as a potential hazard for the company's helicopter when landing. As a leading doctor in the city, Dr Cox feels morally obliged to accede to the request to remove the tree in the interests of public safety for the helicopter for news services. However, to do so further raises the public perception of an impact by radiation upon the subject. Because of the recently understood possible impacts of radiation from microwaves, he believes there is a public perception that land within a certain radial distance is a potential health hazard. The existence of vegetation preventing direct line of sight from the tower would, in his opinion, provide the perception of a visual block, against any radiation, and thus lessen any impacts. He referred to a newspaper article which infers that, for health reasons, a 300-metre exclusion zone should be applied around any mobile telephone towers. Dr Cox also referred to possible links between childhood cancer and electromagnetic radiation. From his experience as a paediatrician in a medical laboratory, Dr Cox is aware that there has been no significant scientific proof of such a link, however, there is a fear in the community to that extent. Nevertheless, such an uncertainty does, in his opinion, impact upon the value of the property. As a paediatrician he is constantly dealing with emotions, and he is aware how they impact rational thought, hence the impact upon the market for land such as the subject. The Nature of the Land: The appellants also argue that approximately 30% of the eastern part of the subject is over the edge of the escarpment and falls steeply, making that part virtually uninhabitable, and certainly preventing further subdivision of the subject. That portion is heavily timbered and forms part of a vegetation bridge between scrub near the Dr Boyce garden in North Street, the WIN television scrub, and the edge of the mountain down to the native bushland. Dr Cox has a major interest in timber and seeks to preserve it wherever possible. Comparison of Sales: In support of his valuation, Mr Doyle provided evidence of the following sales of comparable vacant land in the area. Sales 1 to 5 all have telephone, electricity, town water and sewerage available, while Sale 6 has electricity, water, telephone and garbage collection. All have concrete kerbing and channelling and there is good access available to all sales:  Sale 1 - (Harvey Street, Mt Lofty - Lot 7 on RP 17742). This is a 1,821 m² parcel located 0.7 km east of the subject, and is zoned as "Rural". The sale -- 4 of 11 -- 5 has a moderate fall from the road with limited views to the north, and is seen as inferior to the subject. The sale sold in September 1996 for $55,000 which, after allowing for improvements, was analysed at $53,400 and applied at $52,000.  Sale 2 - (Harvey Street, Mt Lofty - Lot 30 on RP 17742). This is a 1,821 m² parcel located 0.8 km east of the subject, and is zoned as "Rural". The sale has an easy slope down to the road, with good views to the north and south, and is inferior to the subject due to its smaller size and less panoramic views. The sale sold in April 1996 for $70,000 which, after allowing for improvements, was analysed at $68,400 and applied at $66,000.  Sale 3 - (Windemere Terrace, Mt Lofty - Lot 34 on RP 856525). This is a corner lot of area 1,013 m², located about 0.3 km east of the subject, and is zoned as "Residential C". The sale has an easy sloping fall from the south to the west, with limited views to the north. The sale is inferior due to its smaller size and limited views. The sale sold in January 1996 for $70,000 which, after allowing for improvements, provided an analysed value of $68,750 and an applied value of $63,000.  Sale 4 - (Windemere Terrace, Mt Lofty - Lot 76 on RP 856525). This is a 1,180 m² parcel located 0.4 km east of the subject, and is zoned as "Residential C". The sale has a gentle slope from the road before falling sharply to the rear, and there are limited views to the north. The sale is inferior due to its smaller size and limited views. The sale sold in February 1996 for $73,000 which, after allowing for improvements, provided an analysed value of $70,525 and was applied at $66,500.  Sale 5 - (Huntingdale Court, Mt Lofty - Lot 16 on RP 895719). This is a 1,050 m² parcel located about 0.6 km east of the subject, and is zoned as "Residential C". The sale has a moderate fall from the road, with good views to the north, and is seen as inferior due to its smaller size and limited views. The sale sold in October 1996 for $80,000 which, after allowing for improvements, was analysed at $78,250 and applied at $72,500.  Sale 6 - (Donaghy Court, Middle Ridge - Lot 11 on RP 849263). This is a 4,217 m² parcel, located on the edge of the escarpment south of Toowoomba, and about 10.4 km south of the subject. The sale is located in a newly developing prestigious locality and is elevated and has a moderate slope from west to east, with good panoramic range views to the east. The sale is superior in location, access and land, but inferior in size. Overall the sale is superior. -- 5 of 11 -- 6 The sale sold in September 1996 for $175,500 which, after allowing for improvements, was analysed at $172,500 and applied at $152,500. Mr Doyle noted that, while Sale 6 was well to the south of the subject, the sale demonstrates, in his opinion, what people will pay for extensive range views, even without sewerage connected. Mr Doyle suggests that the evidence of his sales indicates that proximity to the television tower has little effect upon potential purchasers in that area, although he concedes that the five sales were not as close to the television tower as the subject. Dr Cox argues that the lack of any sales of properties within 300 metres of the tower indicates that there is a resistance to the existence of the tower. From his personal experience with other medical people in the area, he concedes that experienced opinion is divided on that matter, but argues that the very unproven nature of the relationship between increased radiation and public health merely adds to uncertainty in the marketplace, and consequently impacts the value of the property. Dr Cox challenges relativity between Sale 6 and the subject as he notes that the only similarity between the two parcels is the existence of range views from both parcels. He notes that Sale 6 does not suffer from the requirement to extend the sewer lines, the disability imposed by the transmitting tower, or the need to provide and maintain an access road, as does the subject. He believes there are more differences between the two sites than any similarity, particularly in respect of the nature of the land. In seeking to understand relativity between the unimproved values of surrounding lots, Dr Cox noted that the adjoining parcel to the south-west of the subject (Lot 10 on RP 166175) is 30% larger in area, is level and located on the top of the hill, with direct access to the public roadway, and with more expansive views than the subject. Its current unimproved value is $192,500. The parcel to the north-east of the subject (Lot 1 on RP 202656), has similar views as the subject, there are no road access problems, sewerage is available without additional cost, the land is flatter than the subject and is suitable for the construction of a tennis court, yet it is only valued at $104,000. By comparison, the nature of the subject, with 30% of its area being very steep, and with physical access requiring the construction and maintenance of the private access road, is valued at $147,000. Dr Cox also noted that the parcel to the south-west (Lot 9 on RP 166175), with legal access to Benjamin Street to the south-west, also has the benefit of a shared access easement through Lot 10 on RP 166175. Both Lots 9 and 10 are on the top of the hill with 360 degree -- 6 of 11 -- 7 views. By comparison, the subject has no views to the north-west, south-west, or west. While much smaller than the subject, Lot 9 has an improved value of only $59,000. Dr Cox concedes that with its north-eastern aspect the subject is shielded from the cold westerly winds. In developing the usable areas of the subject, the appellants have had to import considerable quantities of soil and fill from external sites at the old Toowoomba Showground and the Mt Lofty Hospital. This has considerably changed the steeper land and Dr Cox claims that those costs should have been considered in the valuation. In comparing views from parcels to the north-east of the subject, Dr Cox claims that those views, while lower than the subject, are partly obscured by timber and do not overlook the new subdivision west of Mackenzie Street, to the same extent as from the subject. This loss of visual impact has occurred steadily over the last 10 years as approximately 90% of the timber was cleared for the new subdivisions. However, Dr Cox concedes that the adjoining Lot 1 (Brilliant) was smaller in area than the subject and at a lower level. Photographs provided in evidence confirmed the relative physical nature of both parcels. In considering his valuation, Mr Doyle has treated the subject, comprising two parcels (Lots 2 and 3), as a single house site for valuation purposes under s.17 of the Valuation of Land Act. Decision I turn first to the matter of access to the subject, and note that both parties agree that the current physical access along the private roadway is, in fact, required to be maintained by the appellants. I note also, by comparison, that access to the adjoining Lot 10 is the responsibility of the Council right up to the boundary of Lot 10 (Exhibit 6), under direction from the State Ombudsman. I can understand, therefore, the appellants' concern that any comparison of the cost of access to the subject should reflect the additional burden of costs upon the appellants. However, in understanding the meaning of the term "unimproved value" of the subject, one needs to seek guidance from the Valuation of Land Act. I note that s.3(1)(b) defines "unimproved value" as: "(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." -- 7 of 11 -- 8 In seeking to determine the value of the land as if all improvements upon it did not exist, one must, however, consider the subject within the context of the surrounding environment existing in its present state. This has long been upheld by precedents in many Courts, and was clearly defined by the Land Appeal Court in PH Clough v. The Valuer-General (1981-82) 8 QLCR 70, at p.75: "We think it beyond doubt that what has to be valued is the subject parcel of land viewed as if the improvements thereon, visible or invisible, never existed but that otherwise the parcel was situated in the community (and environment) with the amenities and facilities that had grown up around it as at date of valuation." Mr Doyle argues that physical access is available near the northern corner of the subject, a fact conceded by Dr Cox. While that location may involve other costs internal to the subject in physically constructing access to the dwelling, within the meaning of the Act, it is reasonable to conclude that good access is available at that point. In the matter of the provision of sewerage to the subject, I note that this has been the subject of misunderstanding by the appellants to this time. As the subdivider, they were obliged to provide the construction of the extension of the sewer line to the subject (Exhibit 3), and to then maintain that line at their cost for a maintenance period of one year following approval of the plan of survey. This is a normal condition of approval by Council. However, since the completion of that period, the sewer line and its maintenance are clearly now the responsibility of Council, as are all other utility services. The cost of providing the sewer line was merely part of the process of obtaining title to the new Lot 3 and is part of the sewerage infrastructure for the area. However, part of that new sewer line (about 50%) is in fact internal to the subject, which comprises Lots 2 and 3 now valued as a single parcel. While I have no evidence in respect of how much of the total cost of $12,000 this represents, I believe some recognition of those internal costs for sewerage could be considered in the final valuation. Had the sewer line only extended to Lot 3, then it would have been inappropriate to make any allowance for providing the sewerage service. In considering the possible impact of radiation from the transmitting tower, only 250 metres from the subject, I note Dr Cox's evidence that direct linkage between childhood cancer and microwave transmission has still to be conclusively proven. As a scientist, Dr Cox fully understands the scientific nature of that possible relationship, perhaps better than most less-skilled observers. His extensive experience in cancer research some 10 years previously strengthens his understanding of the possible nature of that relationship. -- 8 of 11 -- 9 However, his experience as a paediatrician provides a quite unique understanding of the very real "fear" that influences parents with matters of such uncertainty. As he noted, when dealing with the possible impact of unknown potential transmissions, he is regularly "dealing with emotions". While those fears may be irrational, they are nevertheless very real to those parents. Because of the publicity surrounding that debate, I would agree with his conclusion that such uncertainty would impact the perceptions in the minds of people considering purchasing the subject, and therefore its value. Valuation is really interpreting the marketplace, with all its vagaries. Transmission radiation is just one of those factors which influence a purchaser. I turn now to the nature of the land, and note that both parties agree that about 30% of the subject is steep and not usable. However, I also note that the subject has been valued as a large single house site. With an overall area of 1.593 ha, the remaining usable area provides a good building site. While it is noted that the subject contains a tennis court, but no swimming-pool, from the photographs there would appear to be adequate area for a pool to be constructed, should the appellants so wish. On balance, I believe the subject is an excellent large residential parcel, with good aspect and views. However, in drawing some comparison with surrounding parcels, I believe the current general nature of the land partly owes its attractiveness to the very extensive filling imported from other places. While those costs were not considered in determining the unimproved value as a vacant site, they have tended to influence the relativity of the subject with surrounding parcels. In considering the matter of relativity in the area, I note that Mr Doyle believes that the adjoining Lot 10 ($192,500) and Lot 1 ($104,000) reflect appropriate differences to the subject at $147,000, considering the difference in views, slopes and areas of the parcels. On the evidence before me, I agree that the valuation of the subject falls within that range. However, in determining the quantum of the valuation I turn to the comparison of sales provided by the respondent. I note also the valuation of Lot 9 ($59,000) which would appear to have been afforded a considerable allowance for the difficulty of physical access from Benjamin Street and the easement access only through Lot 10. While Lot 9 is a much smaller parcel than the subject, its superior views clearly make it attractive, notwithstanding its closer proximity to the transmitter tower. Dr Cox raises the question as to whether the valuation of Lot 1 ($104,000) was too low, if the valuation of the subject is correct at $147,000. However, the appellants are -- 9 of 11 -- 10 entitled to rely on surrounding relativities to support their case, and there is no reason to question the unimproved value of Lot 1. That principle was followed in TF & SA Shepherdson v. The Valuer-General (1992-93) 14 QLCR 83, at pp.86 and 87: " The appellants in this case, while critical of some aspects of the sales evidence, did not seek to destroy its evidentiary value by suggesting that the sales were so widely different in nature and character from the subject site as to make them of no real utility in determining the unimproved value of the subject land. ... 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." That principle was also followed in the findings of R and MM Barnwell v. The Valuer-General (AV89-34) (1990-91) 13 QLCR 13, where the Land Appeal Court said at p.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." In considering then the evidence of sales by the respondent, I note that Sales 1 to 5 are all much smaller parcels with values in the range from $55,000 to $80,000. All are seen as inferior to the subject. The only sale seen as superior to the subject is Sale 6 at $175,500, and applied at $152,500. Sale 6 is seen as superior in all aspects except for size, as it is only 4,217 m² in area. However, Sale 6 is more than 10 km south of the subject in an entirely different locality. The common thread between Sale 6 and the subject is the existence of range views. I accept that Sale 6 does indicate that purchasers pay a premium for range views, however, the differences in other aspects between Sale 6 and the subject do not help me greatly in quantifying that premium. While allowing that the subject is well located with good aspect and views, I seek other guidance in the relativities with surrounding parcels. In this regard I note that the value of the subject at $147,000 is almost exactly the mid point between the value of Lot 10 ($192,500) and the value of Lot 1 ($104,000). On balance, noting the areas of the parcels, their outlook and views, and the nature of the land, I feel the subject would have a value nearer to Lot 1 than to Lot 10. In determining the valuation, I note that s.33 of the Act specifies: -- 10 of 11 -- 11 "33. Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered." Clearly then, the onus of proof rests upon the appellants to prove that the Chief Executive has made either an error in point of law (CH & BD Henricks v. Valuer-General, Full Court of Queensland (1983) 9 QLCR 59); an error in principle or application (Fenton Nominees Pty Ltd v. Valuer-General, (1981) Supreme Court of South Australia 47 LGRA 72,); or has made a wrong decision (Brisbane City Council v. The Valuer-General, High Court of Australia (1977-78) 140 CLR 41, where Gibbs J found at p.56: "In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong practice, or made a serious error of fact, the presumption created by s.13(7) is rebutted." On the evidence provided I believe that the appellants have demonstrated that the original nature of the land has been overestimated, some deduction would be appropriate for the internal sewer line improvements and the possible impact of the transmission tower has not been adequately allowed for. While I have no clear guidance as to the actual quantum of those three factors, I believe a reasonable estimate of the valuation at $130,000 would be appropriate. Conclusion: After having considered the whole of the evidence, I am persuaded that the appellants have partially proved their case. The appeal is allowed, the valuation of the Chief Executive is set aside, and the unimproved value of Lot 2 on RP 190453 and Lot 3 on RP 202656 is determined at One Hundred and Thirty Thousand Dollars ($130,000). NG DIVETT MEMBER OF THE LAND COURT -- 11 of 11 --