Barker & Anor v The Valuer-General [1990] QLC 143

Re: Appeal against a determination of the Valuer-General - Logan City. (AV90-314) E & CA Barker v. The Valuer-General DE C I S I O N IANDCOURT, BRISBANE. 27th September, 1990. As at 31st March, 1989 the Valuer-General determined the unimproved value of land described as Lot 15 on Registered Plan No. 105404, Parish of Mackenzie, containing 2.86 hectares and situated at N o.100 Bumstead Road, Park Ridge, as $57,000. The land is zoned "Rural", fronts a bitumen sealed road and has town water, telephone and electricity available. The appellants contend for a valuation of $32,000. The grounds of the appeal are that as at 31st March, 1988, the Valuer-General had first increased the valuation from $32,000 to $38,500 but then on objection and based on significant flooding problems, reduced it back to $32,000. Apparently notice of that decision was given on 31st July, 1989, then the valuation under appeal was published some 4 to 5 months later. The appellants say that during this 4 to 5 month period, there had been a significant downturn in values in the locality, rather than an increase. They also claim that .the subject property carries a higher value than some more elevated and more desirable land in the immediate locality and that the Valuer-General has not taken into account the detrimental effect of the flooding or the previous reduction because of flooding. [1990] QLC 143 -- 1 of 7 -- 2 Mr E. Barker attended and gave oral evidence in support of his submission. He tendered a number of photographs which portrayed the effect of regular flooding. The area under the high-set dwelling is regularly inundated as is about 70% of the site area. The flooding problem is caused mainly by Bumstead Road being built up by about 1 metre causing a damming effect exacerbated by inadequate drainage under the roadway. Mr Barker says that because of the nature of the soils on the property, it remains boggy for some months after floodwaters recede. He is of the opinion that the subject property and the property immediately adjoining to the west (Lot 14) were the only two blocks in the locality with significant effect from the flooding disability. He agreed that Lot 14 had a greater surface area covered, up to 95%, and could be seen to be even inferior to the subject although the soil types on Lot 14 allowed it to be worked more quickly after rain. He also agreed that a strip along the eastern boundary of the subject, of varying but narrow width, was free of surface flooding, although unless formed it would not be suitable for vehicular access due to bagginess. It was his understanding that the valuation on Lot 14 had been reduced from $55,000 to $45,000 at the same date as relevant to this matter, although he was of the opinion that the reduced valuation was still too high and referred to that property having been purchased in 1987 for $24,000. He made particular reference to Lot 38 in Park Ridge Road of similar size to the subject but higher in elevation with no flood disability which had been valued by the Valuer-General at $51,000. Evidence for the Valuer-General was given by Mr I.G. Savage, a Registered Rural Valuer, who was responsible for the valuation under appeal. His valuation was based on the evidence of four sales as follows: (1) Subdivision 18 Portion 66V - 2.887 hectares - Bumstead Road - sold with fencing and clearing on 28th November, 1988 for $83,000, analysed to show an -- 2 of 7 -- 3 unimproved value of $80,500 with an application of $75,000. Mr Savage's comments are "same size as subject. Elevated block with gentle fall to rear and a cross slope falling to the west. Same road and services as subject. Superior to subject." This site is a short distance to the east of the subject. Mr Barker says it is not comparable,, being "on top of a hill." (2) Subdivision 11 Portion 66V - 3.03 hectares - Bumstead Road - sold with fencing on 14th January, 1989 for $62,000, analysed to show an unimproved value of $61,000 with an application of $60,000. It is described as "Just bigger than subject. Land falls from north-west to gully, running west to east approximately 230 metres from the front. The block then rises to the rear. Same road as subject but does not have town water. Superior to subject." Sale 2 is a short distance to the west of the subject. A map which Mr Savage had tendered with his report showed that this property had flooded in 1974 in the rear gully area as described. Mr Barker was of the opinion that this property while not of the same quality as Sale 1 was again significantly superior to the subject and while it may have flooded to the extent indicated in 1974, he did not think any regular flooding disability was in any way comparable to that of the subject. (3) Subdivision 7 Portion 64V - 3.518 hectares - Lindenthal (or Clarke) Road, sold unimproved on 15th August, 1988 for $55,000 with an application of $55,000. It is described by Mr Savage as follows "Bigger than subject. On gravel road with no town water. Low wet, ti-tree block. A small watercourse cuts the western boundary into approximate halves and then flows through the northern boundary approximately 150 metres from the western comer. Overall block has -- 3 of 7 -- .. 4 a very gentle fall to the north-east. Resold 25th June, 1989 for $63,000." During his evidence Mr Savage indicated an opinion that the locality of this sale property was inferior to that of the subject, being some distance to the south-west. Although contoured aerial photography supplied with his report indicated the sale property to be of somewhat higher elevation that the subject, Mr Savage maintained that the land in comparison with its surroundings gave the impression of being low in elevation and the ti-tree timber cover was an indication of its wetness. Mr Barker did not have particular knowledge of this site but disputed the description of its low elevation, based on the contours, and also the inferiority of its location as evidenced by what he says were good quality dwellings in its vicinity. He also offered the opinion that it was common local knowledge at the time of sale that water (which was subsequently provided) was to be reticulated into that locality. (4) Lot 47 on RP 85473 - 1.619 hectares - Second Avenue, Marsden - sold on 6th April, 1989 with some fencing for $40,000, analysed to show an unimproved value of $39,700 with an application of $36,000. Mr Savage makes the following comparison, "Smaller than subject. Basically level ti-tree block which completely floods. Same services as subject. A ten metre drainage easement runs along and inside the northern boundary. Inferior to the subject." Mr Barker had no specific knowledge of this sale property. Mr Savage describes the subject land as having an easy cross slope falling from east to west. He says the "western side of the block is below the Logan City Council designated flood line." A more accurate description would seem to be that a strip of varying width along the eastern boundary is above the designated flood line. The -- 4 of 7 -- 5 balance area, estimated by the appellant to be about 70% of the total suffers from regular inundation, apparently caused by adjacent roadworks with inadequate drainage provision. Mr Savage agrees that the relativity between the subject valuation and the land referred to by the appellants in Park Ridge Road to the south is wrong, but rather than the subject valuation being wrong, he says the Park Ridge Road valuations are too low. As I understand his evidence, the Park Ridge Road valuations had been the responsibility of another Valuer and when Mr Savage was given the task of carrying out the Bumstead Road valuations he reviewed all of the available evidence and made his decisions based on the sales presented to the Court. He indicated that the relativity would be reviewed when the next annual valuation was carried out. It was part of the Valuer-General's submission that I should decide this matter on the sales evidence before the Court and not on relativity, in accord with the decision of the Land Appeal Court in W.M. & T.J. Fischer v. The Valuer General OLCR 19 83 (9) 44, where it was held "that it is a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant · or lightly improved parcels." It is noted that the comment was also made in that decision "That maintenance of correct relativity is also of considerable importance for rating or revenue type valuations". There is in this locality, the need for manual attention to relativity at the time of the next valuation. Now if the sales evidence and comparisons made by Mr Savage were not challenged then it would follow that the appeal should be dismissed. That is not what emerged. The disability of the subject property and, from a market value point of view - a major disability, is the susceptibility of the site to regular flooding over a large part of its surface area. Mr Savage makes the point that if it was unimproved, as he is -- 5 of 7 -- 6 required to look at the site, a prudent owner aware of the flooding problem, and no doubt also the Logan City Council, would require the site selected for building to be raised, by filling above flood level. Some discussion took place as to the cost of this exercise. There remains, of course, the question of provision of formed access on the flood free area to a building site, but then the real inconvenience of the regular flooding of the grounds and the lack of mobility over the rural residential hectarage site for long periods after floods due to the boggy nature of the soils. Apart from the fourth sale in a distinctly different locality, none of the sales used by Mr Savage suffered the flood disability of the subject. The second sale had an area which was below the flood line but towards the rear of the property with little, if any, effect on the natural homesite area, and with limited effect on rural residential usage of the site. This sale was analysed to show an unimproved value of $61,000 and a valuation of $60,000 was applied when town water had not, on the evidence, been extended. A valuation of $57,000 on the subject appears to me to be clearly excessive on this single comparison. Sale 1 is on the evidence, much superior with no flood disability. Sale 3 is in a somewhat different location and while described as low and wet, some doubt has been raised about the description "low" in comparison with the subject. Sale 3 as evidenced by the contour information may be lower than surrounding property and may have some drainage disability, but I cannot accept that it should be seen in the same light as a site suffering regular flooding. I find that the appellant has met the onus of showing that the Valuer-General has given insufficient weight to the flood disability on the subject site. The contended value of $32,000 has not been proven, and while the comparison with the Valuer- General's Sale No.4 is difficult, that sale does provide a value over which that of the subject should lie. On the evidence and paying particular regard to the effect that the -- 6 of 7 -- 7 flooding should have on a prudent vendor and purchaser of the site in a hypothetical unimproved state, a valuation of $45,000 is considered reasonable. It is noted that such a valuation will create incorrect relativity with the obviously inferior Lot 14 adjoining - another matter of relativity which will need attention at the time of the next annual valuation. The appeal is allowed, the Valuer-General's determination set aside and the unimproved value of the land determined as $45,000. (R.E. Wenck) Member of the Land Court -- 7 of 7 --