Dickson v Chief Executive, Department of Natural Resources [1997] QLC 85

LAND COURT BRISBANE 6 JUNE 1997 Re: Appeal against Valuation - Valuation of Land Act 1944 - Shire of Cardwell. (AV96-118). Roy Dickson and Claire I Dickson v. Chief Executive, Department of Natural Resources (Hearing at Innisfail) D E C I S I O N Mr and Mrs Dickson are the owners of land described as Lot 71 on Plan CWL940, Parish of Meunga, County of Cardwell, containing an area of 47.08 ha. Under the provisions of the Valuation of Land Act 1944 (the Act), as at 1 January 1995, the Chief Executive determined the unimproved value of that land at $45,000. The owners objected against that valuation and were successful in having the valuation reduced to $37,500. However, they appealed to the Land Court against the respondent's decision upon their objection, advising that their estimate of the unimproved value is $20,000. The subject land is situated approximately 18.5 km north-west of Cardwell and approximately 25.5 km south of Tully. Its only access is by means of an easement of approximately 653 metres in length and approximately 20 metres in width over Lot 2 on Registered Plan 857627. Although the easement has no constructed road, it fronts the Bilyana Back Road (also known as the Old Tully Road), which has a gravel surface, approximately 2.5 km from the bitumen sealed Bruce Highway. The land is zoned “Rural (General Farming)” under the Shire of Cardwell Town Planning Scheme and is unused. Although there are no services to the land, electricity and telephone services are available in the area. Mr Roy Dickson, a registered valuer in practice in Cardwell, appeared and gave evidence on behalf of the appellants. The respondent was represented by Senior Valuer PF Goodman-Jones, while Mr EM Migliorini, a registered valuer employed by the Department of Natural Resources, gave valuation evidence. There was little agreement between the two valuers on any aspect of this appeal. Mr Migliorini described the property thus: “The land comprises of moderate to steep to rugged ridge spurs with rock boulder outcrops, broken by seasonal gully watercourses. Vegetation comprises of coastal forest with some tropical scrub on gully lines in the northern section of the property. [1997] QLC 85 -- 1 of 5 -- 2 An elevated building site is available near the easement access boundary in the south-eastern corner of the lot. A rural outlook to the offshore islands is available from the land. Natural water is available for a domestic supply from an unnamed tributary of Double Barrel Creek.” Mr Migliorini was of the opinion that the highest and best use of the land would be as a rural residential site. Mr Dickson strongly disagreed. He was at a loss to suggest any highest and best use for the land. In his opinion, the land was virtually useless. He considered that it was not practical to use the land as a rural residential site. The cost of constructing an all-weather road on the easement from the Old Tully Road would be of the order of $10,000 to $15,000. The cost of providing power could be anything up to $20,000. Mr Dickson went on to say that there was no natural water, the creek on the land lasting only about six months of the year. Mr Dickson explained that the subject land had previously been valued in conjunction with Lot 98, which was situated between the subject land and the Old Tully Road. However, when Lot 98 had been subdivided into Lots 1 to 4 on Registered Plan 857627, Mr Dickson had tried to sell the subject land with Lots 1 and 2. However, the purchaser did not want it. Therefore, in order to obtain registration of the plan, the easement access to the subject land had to be provided for over Lot 2. Mr Dickson said that unless the owners were able to have the subject land rezoned, possibly for Group Title subdivision, they were stuck with it. Mr Dickson did concede that there were good views from the higher ridge on the subject land to the ocean and the Family Group of islands. However, he felt the difficulties and cost of providing practical access and services to the land prevented it from being considered as a rural residential site. For that reason he could find no comparable sales as a basis for his valuation. Upon reflection, he sought to lead evidence of an unimproved value of only $10,000, rather than the $20,000 in his notice of appeal. Mr Migliorini valued the subject land as a rural residential site. He agreed that in order to make use of the land for such purposes, a gravel road would have to be constructed along the easement. However, he did not see that as posing a problem, as there were easy slopes along the easement and he thought that a road could be constructed for $5,000, which would include the cost of a concrete pipe culvert to cross a gully, to gain access to a house site near where the easement joined the land. Mr Migliorini agreed that providing electricity to the site could be costly. However, he suggested that the use of either solar power or diesel generated power would be options which a prudent purchaser would consider. He thought that there were seasonal water supplies in a watercourse on the land, because the farms below derived irrigation water from the same creek. Mr Migliorini also thought that there was a suitable site for a house near the easement, which would have views across grazing properties and to the tops of the hills on nearby islands, but not -- 2 of 5 -- 3 ocean views. Better views could be gained from higher ridges on the subject land. However, additional costs would be incurred to get access to those sites with the better views. While he agreed there were better rural homesites than the subject land in the area, he was of the opinion that there were purchasers in the marketplace who would be willing to buy remote sites for the peace and solitude they provided and particularly for the views that could be obtained from them. In support of his valuation, Mr Migliorini relied upon three sales. His Sale No. 1 is situated in Bluff Road, Bilyana, has an area of 141.2 ha, was zoned “Rural (General Farming)”, and which sold in January 1995, for $120,000. Mr Migliorini analysed that sale to show an unimproved value of $90,000, and he applied that unimproved value to the land as at 1 January 1995. That sale is situated about 7 km east of the Bruce Highway on a comparable gravel road to the Old Tully Road. It comprises Murray River frontage lands, including narrow flooded scrub flats, tidal mangroves and large areas of Ti-tree swamps. Mr Migliorini regarded that sale as superior to the subject land in services, land area and topography. However, the sale did not have the subject land's rural residential views or outlook. Overall he considered the sale to be superior to the subject land. While he realised that the sale was far from ideal, Mr Migliorini said that it gave some indication of the range of values of large acreage lots. He considered it to be the best evidence available, even though it was flat and flooded land. Mr Dickson disagreed that the sale provided any basis for the valuation of the subject land. He knew the property and said that it had been purchased with the intention of using it for agriculture, the grazing of cattle and aquaculture. Mr Migliorini's Sale No. 2 is situated in Mt Myrtle Road, East Feluga, has an area of 53.58 ha, was zoned “Rural (Agriculture)”, and sold in January 1995 for $100,000. Mr Migliorini analysed that sale to show an unimproved value of $75,000, which unimproved value he applied as at 1 January 1995. The sale property comprised moderate to steep to rugged vine scrub ridge slopes, broken by several gully lines and watercourses. It had electricity and telephone services available at less cost than would be incurred to connect to the subject land. The land is situated about 4 km east of the Bruce Highway and about 12 km north-east of Tully. Mr Migliorini considered the sale to be superior to the subject land in area, services, topography, access and situation. He said that the purchasers were seeking the headwaters of a freshwater stream for possible use for organic farming. Mr Dickson agreed that Sale 2 had more features that were comparable with those of the subject land, but felt that it had at least a $20,000 advantage, because of the proximity of power. It was, however, in the Feluga area, which he described as inhabited by “alternative lifestyle people”, which may have been an attraction for the purchaser. He felt that there was greater demand in that area for land because of its location and that purchasers would pay more in that area than in the vicinity of the subject land. -- 3 of 5 -- 4 Mr Migliorini's Sale No. 3 is situated in Sullivan Road, Ellerbeck, about 12.5 km north-west of Cardwell. The sale had superior access and situation. That property has an area of only 0.92 ha and sold in September 1994, for $36,000. It was analysed by Mr Migliorini to show an unimproved value of $35,000 and he applied $30,000 to it as at 1 January 1995. The sale land was a coastal forest flat, with no views or outlook. He considered it to be inferior to the subject land not only in area, but in rural residential views and outlook. He said that he had included that sale to give an indication of the price that could be obtained for a 1 hectare site near Cardwell, with services available. He contended that generally rural homesites in the Shire sold from $30,000 to $40,000, with the average being about $35,000. He said that although rural homesite purchasers would pay more for larger areas, they would not pay proportionally more. He thought that purchasers would pay up to $120,000 for an appropriate rural residential property. Mr Dickson agreed that Sale No. 3 was an example of the market for a rural residential site with facilities and would be about the price he could obtain for the subject land if it had those facilities available. However, if the cost of access and electricity was deducted, it would leave very little for the unimproved value of the subject land. In this case there was little agreement between the valuers. It emerged in evidence that Mr Dickson had been trying to sell the subject land for $50,000 for some time. However, there had been no interest in the land at that price. Mr Migliorini expressed the opinion that if the subject land had access and power, it would attract a purchase price of $60,000. He had used that figure as a starting point and had deducted the cost of construction of 650 metres of road, allowing for the cost of gravel and two lengths of 900 mm concrete pipe to construct a culvert over a gully. He thought that road construction would cost approximately $5,000. He had then allowed another $15,000 to provide for the cost of obtaining power and for the clearing and construction of a small bench for a house site near the easement. He was of the opinion that his unimproved value of $37,500 was conservative. On the other hand, Mr Dickson saw the land to be of very little value. However, that was quite inconsistent with his asking price of $50,000. Be that as it may, there had been no interest in the land at that price and a mere asking price is not evidence of value. I cannot place any reliance on it in determining the unimproved value. There is no doubt that the subject land is a unique site, with particular access problems, but with very good views from the higher land. Mr Migliorini was of the opinion that there is a market for such isolated and remote properties. He felt that purchasers would be prepared to pay for the provision of access. If the provision of power proved to be too expensive, they could resort to other options such as solar power or diesel generated power. The sales evidence in this case is by no means ideal. The three sales relied upon by Mr Migliorini are not directly comparable. The evidence indicates that neither Sale No. 1 nor Sale No. 2 were purchased for use as rural residential sites, as the purchasers had other uses in mind. -- 4 of 5 -- 5 Sale No. 3 would provide perhaps the best indication of what a prudent purchaser would be prepared to pay for a basic rural residential site. Although that site was small and had no views, it did have access and power available. From the evidence that was presented, I feel that the subject land can be valued at no more than a basic rural residential site. Therefore, I intend to adopt what the valuers agree is the minimum value for a rural residential site of $30,000 Accordingly, the appeal is allowed, the valuation of the Chief Executive is set aside, and the unimproved value of the subject land is determined at Thirty thousand dollars ($30,000). JJ TRICKETT PRESIDENT OF THE LAND COURT -- 5 of 5 --