Barker v Chief Executive, Department of Natural Resources [1997] QLC 28

LAND COURT BRISBANE 4 March 1997 Re: Appeal against Annual Valuation - Valuation of Land Act 1944 - Valuation Roll No: 19057 Local Government: Logan City (AV96-161). Edward and Carol A Barker v. Chief Executive, Department of Natural Resources D E C I S I O N Background: The key issues in this appeal relate to the comparison of sales, relativity, and recognition of the importance of flooding upon the land. The appeal relates to a parcel of land located at 100 Bumstead Road, Parkridge, Logan City Council, and described as Lot 15 on RP 105404. The property has an area of 2.86 hectares, and is zoned "Rural" under the City of Logan Town Plan of 17 December 1988. The land is used as a rural residential homesite. The property is situated approximately 27 kilometres south-west of Brisbane GPO, and approximately 4 kilometres south-west of the Marsden Post Office and Shopping Centre. The land has good access to Bumstead Road, which is a dual-width bitumen sealed carriageway and earth drainage. A large area of the parcel is subject to flooding. The Chief Executive, Department of Natural Resources, in March 1996, valued the parcel at $115,000. Following an objection conference in April 1996, the valuation was reduced on 5 June 1996, to $110,000. Evidence: The appellants argue that relativity between the subject land and adjoining parcels of similar size within about one kilometre of the subject have not been appropriately maintained, and that the respondent has not adequately allowed for the detrimental impact of flooding upon the land. The appellants conceded that they had not considered comparable relevant sales of vacant sites in preparing their case as they believe relativity was more appropriate to their land. They had concluded that certain sales of vacant land in the Parkridge area reflect a highest and best use as [1997] QLC 28 -- 1 of 6 -- 2 potential subdivision land, rather than as rural single unit homesites. The appellants provided evidence of four valuations of lands within the near vicinity of the subject land, which supported their claim for a reduction in the valuation: Valuation A:Parkridge Road (Lot 1 on RP 195317) is about 40 feet higher than the subject, and has some water runoff after heavy rain; but is upstream of the subject and is seen as superior to the subject. It has the same land use as the subject as a rural residential homesite, with an area of 2.421 hectares, and an unimproved value of $100,000. Valuation B:Bumstead Road (Lot 5 on RP 105404) is about 50 feet to 100 feet higher than the subject, and has water runoff in heavy rain. It is located to the west of the subject with an area of 2.999 hectares. Its unimproved value is $130,000 and is seen as superior to the subject. Valuation C:Parkridge Road (Lots 44 and 45 on S31.2984) is currently leased and used only for agistment for a couple of calves, by the Royal Society for the Prevention of Cruelty to Animals (RSPCA). It was formerly used as a private golf course by the owner. The lots have unimproved values of $80,000 (Lot 45) and $75,000 (Lot 44) and are seen as superior to the subject. To their knowledge, the lots have not been used for primary production by the existing owner. Valuation D:Bumstead Road (Lot 42 on RP 128981) is on the northern side of Bumstead Road, opposite the subject. It is downstream in the watercourse from the subject, and has a small channel which generally confines flooding to the watercourse along its western boundary. The parcel has an area of 3.137 hectares and has an unimproved value or $80,000. (This was amended to $85,000 on advice from the respondents). The matter of the extent of flooding, and its duration and consistency, is a matter of major concern to the appellants. Evidence was given, and not refuted, that during periods of a year about the late-1980s, the land was inundated many times and the dwelling actually flooded about six times. It was agreed by both parties that the land is prone to local flooding after heavy rains. -- 2 of 6 -- 3 The appellants supplied photographs of the subject land taken after heavy rain in February and April 1990, and May and December 1996. The photographs documented that the western side of the subject land was inundated, covering about 40 metres of the parcel, or approximately 0.8 hectares. One photograph purported to demonstrate that even after a long dry period in December 1996, following a 2-inch downpour, the western side of the subject land was inundated by "flash flooding". Damage by flooding to the building and laundry was provided. Evidence was also given, and not refuted, that the cause of the local "flash flooding" was to be found in a pipe culvert across Bumstead Road opposite the subject. This culvert is inadequate in size to carry the sudden volume of runoff from surrounding land, and Bumstead Road acts as a dam causing backup across the subject. The extent of this local backup flooding is restricted to Lot 15, Lot 14 and parts of Lot 13. On the northern side of Bumstead Road, at Lot 44, the appellants argued that because of the inadequate pipe culvert, flooding, while freely flowing, is less extensive in area than the subject land. The appellants conceded that when they purchased the land eleven years ago they were aware that the land sometimes flooded, but were not aware of the extent and repetitive nature of the flooding. Hearsay evidence from the Logan City Council indicates that any application to build again on the land would require considerable earthworks to raise a building site above the current flood level. In seeking to establish the market for sales of vacant land in the Parkridge area, a registered valuer in the employ of the Department of Natural Resources, Mr WJ Crothers, submitted four sales as evidence: Sale 1 -Second Avenue, Marsden. (Lot 2 on RP 150202) is located on the corner of Second and Third Avenues, Marsden, about 4 kms north of the subject. It has an area of 2.87 hectares and is 100% flood prone and the Logan City Council prohibit any residential use of the land. Because of the restricted use for residential purposes it is seen as inferior to the subject. It was sold for $83,000 in March 1995 and has an unimproved value of $79,000. Sale 2 -Green Road, Park Ridge. (Lot 11 on RP 96003) is located about 2 kms west of the subject, and has an area of 4.145 hectares. It is seen as superior in topography and size and is overall superior to the subject. The land was sold in October 1995 for $160,000 and has an unimproved value of $140,000. Sale 3 -Koplick Road, Park Ridge. (Lot 9 on RP 853152) is located about 5 kms south-west of the subject, and has an area of 1 hectare, about two-thirds of which is both subject to flooding and under a power easement, which precludes building in that area. The land was sold in February 1995, -- 3 of 6 -- 4 for $70,000, and its unimproved value is $60,000. Overall the land is inferior to the subject. Decision: While the appellants sought to rely upon relativity with adjoining and nearby parcels to support their claim, they were unable to discredit the sales evidence supplied by Mr Crothers, who sought to establish the relative value of land subject to flooding. There was concern by the appellant that Sale 1 (Second Avenue) should not be compared to the subject because the parcel in Sale 1 could not be used for residential purposes. However, as noted in RO Rost and HG Collins, 3rd Edition, at p.88: "In valuation practice, 'comparable sales' are sales that are used or which can be used as bases for the valuation of lands of a similar nature. This does not mean that sales from which basic values are deduced must be the same in every way as the lands to which the basic values apply. ... Sale and subject properties should, however, be reasonably similar as to location, magnitude, tenancy, permitted land use and, if rural, productivity per hectare. Analyses enable the valuer to assess points of agreement and of difference. " Clearly a definition of "comparable land" encompasses factors which are able to be compared, noting both similarities and differences. Mr Crothers' purpose in comparing Second Avenue to the subject was to compare the impact of flooding on the land. While the Second Avenue land can have a different land use to the subject, that does not disqualify the sale as comparable in respect of the evidence of value. In respect of the determination of market value of the land, it is noted in R and MM Barnwell v. The Valuer-General (1989) 13 QLCR at p.16: "It is desirable that valuations made for the purposes of the Valuation of Land Act 1944 of comparable lands should bear proper relativity, one to the other, so long as 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. " This was also found in PH Clough v. The Valuer-General - Caboolture Shire (1981-82) 8 QLCR at p.76: "It has been judiciously laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value. The reason is obvious. In applying such sales there is no room for error in analyzing the value of improvements. " The evidence of comparative sales is therefore the preferred method of arriving -- 4 of 6 -- 5 at the valuation of the land. Overall there is no reason to conclude other than that the evidence of the sales information supplied by the respondent supports a general valuation of land in Bumstead Road at approximately $115,000 for a comparable rural residential parcel similar in area to the subject land. However, the key issue in this matter lies with the actual quantum of disabilities suffered by the subject as a consequence of the inadequate culvert drainage across Bumstead Road. As noted by the evidence, this is restricted to three parcels in Bumstead Road and constitutes a major disadvantage to the owners of those three parcels. There was some difference in perception of the area of the subject that was liable to flooding as shown in the Flood Plan of the Logan City Council. The appellants argued that they had estimated the area subject to flooding to represent 90% of the total area. Mr Crothers gave evidence of how he determined the area at something less than 90% of the total area. Whatever the actual area is, it is clear that both parties agree that the subject is heavily impacted by flooding. While general flooding was likely to be involved in the Logan City Council records, the actual extent of local backup flooding may well exceed those figures, and I am persuaded to err on the high side in view of the appellants' unfortunate experiences with floods over recent years. I believe an allowance somewhat comparable to Lot 42 across Bumstead Road would be appropriate. Bearing in mind that Lot 42 is downstream in the waterway from the subject and has faster moving water in floodtimes, I believe Lot 42 should continue to be seen as the parcel which is most frequently affected adversely by flooding, with its unimproved value of $85,000. The subject land would, in my opinion, have an unimproved value of $95,000. It should be noted that this may vary at some time in the future should the culvert pipe in Bumstead Road be increased in size to reduce the current backup flooding on the subject. Summary: In determining amendments or alterations to the valuation, the onus of proof rests upon the appellants, under section 33 formerly section 13(7) of the Valuation of Land Act 1944, which states: "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. " In summarising, I believe that the appellant has satisfied the onus of proof that the Chief Executive has failed to take full consideration of the impact of flooding on the subject. In accordance with the decision of the High Court in Brisbane City Council v. The Valuer-General (1977-78) 140 CLR p.41, where Gibbs J found at p.56: "In my opinion once it is shown that in making the valuation the Valuer-General -- 5 of 6 -- 6 acted upon a wrong principle, or made a serious error of fact, the resumption created by s.13(7) is rebutted. " Conclusion: After having considered the whole of the evidence, I am persuaded that the appellants have proved their case. The appeal is allowed, the Chief Executive's valuation is set aside, and the unimproved value of Lot 15 on RP 105404 is determined at Ninety-five thousand dollars ($95,000). (NG Divett) Member of the Land Court -- 6 of 6 --