Duncombe v The Valuer-General [1990] QLC 187

.. ' ,,, • ' . ~ . -{ '-\." -~ ... :./ !I 'H ' _______ ___. :-- ..............._,.~ ....., ... ,..,......,.,...., Re: Appeal against valuation of the Valuer-General Shire of Pine Rivers (V89-516) - Kenneth J. Duncombe -v- The Valuer-General - DECISION - LAND COURT, BRISBANE. 4th May, 1990. This is an appeal against the valuation of the Valuer-General of the unimproved value of Lot 6 on Registered Plan No. 218538 parish of Warner, containing 72.09 hectares. In the revaluation of the lands in the Shire as at 31st March, 1988 the Valuer-General valued this land at $937,000 but this was reduced on objection to $865,000 ($12,000 per hectare). The appellant has exercised the right of appeal to the Land Court against this determination. The subject land is situated about 8 kms by road west from the Strathpine Post Office. It was at the date of valuation, part of a larger parcel of 134.3 ha. On 19th December, 1988 the Valuer-General under Valuation Roll 13460, issued a valuation of $1,880,000 as at 31st March, 1988. A subdivision was undertaken and on 20th March, 1989, a further notice of valuation was issued in respect of the subject land in the sum of $937,000. The balance land was the subject of three (3) separate valuations but in all, the area was reduced to 119.63 ha. The difference in area results because part of the original parcel was dedicated for park lands. These parcels were valued at $855,000; $26,500 and $25,000 respectively. These valuations combined with the subject totalled $1,843,500. The original . parcel had frontage to road reservations on the east, south and south-west by Ira Buckby Road. It was severed from north to south by One Mile Creek [1990] QLC 187 -- 1 of 12 -- - Page 2 - and the subject land is the western severance. The eastern severance has been developed by the appellant into a private rural life style community with one entrance into the area off Ira Buckby Road through Cashmere Lane towards the north-eastern comer of the estate. Valuation evidence was given by valuer, Sir Frank Moore, on behalf of the appellant. He describes the subject land as being an isolated block. He says that it has no water supply or electric power and no practical access due to the depth, width and nature of One Mile Creek. Travelling from east to west Ira Buckby Road is only formed for some distance. There is then a fairly deep wash-out in the road reserve and then some distance to One Mile Creek which is a wide creek which he estimates to be some 70 to 80 metres in width in the bed of the Creek. He is of the opinion that the only way to obtain access in this direction would be to undertake considerable bridge work. He has obtained an estimate from Crescent $tructural Design Pty. Ltd., Consulting Structural and Civil Engineers for a bridge 70 metres in length and a width of 7.2 metres plus 1.8 metre footway at a height of 3 metres approximately at an estimated cost of $552,000. The only practical access for vehicles to the subject land at the p~esent time is by a circuitous route going northerly along Ira Buckby Road into Samsonvale Road travelling westerly then southerly along a road which joins West Ira Buckby Road then easterly along Ira Buckby Road until that road reaches Portion 25V then on an unformed road across that portion in a north-easterly direction until it joins the western boundary of the subject land almost in the north-western comer. Sir Frank has looked at the question of relativity between the valuation placed on the subject land and on lands in close proximity. He looks at the valuation placed on Cashmere Place which he believes is $800,000 for 62.25 ha ($12,851 per ha). On the -- 2 of 12 -- - Page 3 - opposite side of Ira Buckby Road to the subject land is a basic sale of a property now owned by Selpam. This is zoned "Park Residential" as is Cashmere Place while the subject land is zoned "Future Rural Living". He says that the Selpam land has been valued by the Valuer-General at $14,000 per hectare. Cashmere Place at $12,851 per hectare and the subject at $12,000 per hectare. He says that this relativity would not be out of place if the subject land shared the same access and the same availability to services as the two comparisons. The subject has an inferior zoning and to bring it into line with the zoning adopted on the two (2) comparisons some time would elapse. The applicant for rezoning would take into consideration that fairly considerable contributions would be sought for roads. In addition there would be the necessity to bridge One Mile Creek. Reference has been made to other valuations, but, from later evidence, it was shown that these valuations were concessional valuations for land exclusively used for a single unit dwelling and are of no assistance here. In dealing with the Selpam lands he said it has a bitumen road along the southern side with water facilities along the eastern side along Ira Buckby and Lilley Roads and power. Cashmere Place has bitumen road access. If all things were equal he would accept the present relativity between the Selpam land and the subject land, but this is not the position. The Selpam land is capable of immediate development from its southern access to Cashs Road. This is now in place and some of the subdivisional roads have been constructed. The external works associated with the Selpam land can be carried out as the development proceeds and paid for from the cash flow generated by sale of allotments. The subject land has the difficulty of obtaining access and the considerable expense in obtaining this access. All costs for bridge and road would have to be outlayed before any cash flow can be generated. In making the comparison he believes that, in addition to including the cost of building the bridge, an allowance should be made for interest for one (1) year on such costs to -- 3 of 12 -- - Page 4 - maintain relativity. He would assess the overall cost at $9,111 per hectare. Sir Frank says that there is a considerable amount of land available in the market place with the lots in Cashmere Place and the lots being developed in the Selpam land and for this reason he sees a long period of time elapsing before it would be a viable proposition to proceed to develop the subject land. He says that the appellant here saw fit to develop the land east of One Mile Creek in establishing Cashmere Place as being the only area suitable for immediate development having regard to difficulties of access to the subject area. In the result he believes, given all the difficulties, a prudent purchaser would not be prepared to pay more than $100,000 for the subject land at the relevant date. Sir Frank then gave consideration to the use to which the subject land was being put at the date of valuation and formed the conclusion that it rightly should be valued under the concessional valuations applicable to Section 11 (1) (vii) of the Valuation of Land Act. He ascertained that some forestry operations were conducted upon the land and he made enquiries as to the income and expenditure associated with that enterprise. He formed the conclusion that there was a bona fide business being carried on. He tendered a schedule of income and some expenditure for the years since 1982. In the result, he believes that it should be valued in terms of that subsection of the Act at $100,000. In the alternative he believes that the highest and best use for the land would be for a rural residential retreat-type block and having regard to the values applied by the Valuer-General on other lands valued on this basis he would adopt a figure of $150,000. It was put to him that the owner might be able to come to an agreement with adjoining owners to gain access to the lands for the purpose of subdivision but he considers that this is speculation and in the event that it should occur then a valuer is -- 4 of 12 -- - Page 5 - looking at an entirely different parcel of land and different valuations considerations would result. In cross-examination it was put to Sir Frank that the Selpam land was not zoned "Park Residential" at the date of-valuation and that at the date of sale it was zoned "Rural" and on 15th May, 1988 it was rezoned "Future Rural Living" and on 15th September, 1988 it was rezoned again to "Park Residential". He says that this was not apparent from the documents made available to him at the office of the Pine Shire. As far as he is aware the purchasers were aware of the need to contribute to the upgrading of Ira Buckby Road and Lilley Road. The major difficulty in applying the sale in his view is the cost of the bridge work. He believes that gaining access from the north is not appropriate as there is an extra 7 kms to be travelled commencing from Ira Buckby Road at Cashmere Place. He was asked why the appellant would not seek to gain access through the land of the neighbour to the north. He says that the appellant does not own the land and he would not know why a landholder would agree to such a proposition or that a prudent purchaser would buy land on such an expectation. In dealing with Cashmere Place he said that he worked on an area of 62.25 ha in arriving at a value of Cashmere Place for an overall $800,000. It was put to him that the area was 47.54 ha for a total valuation of $950,000 ($20,000 per hectare). He says that this does not alter his opinion on the relativity of values as Cashmere Place is now an entirely different proposition. Evidence was given by the appellant Mr. K.J. Duncombe who says that there would be heavy costs in obtaining services to the subject land and believes it would cost $80 per metre for 2,000 metres to get the water into the land on Ira Buckby Road and electricity some $30,000 and in all probability $150,000 to put the telephone service down in a subdivisional exercise. Mr Duncombe says that he purchased the original parcel of 134.3 hectares some ten years ago and while he is a land developer, he sees the subject -- 5 of 12 -- - Page 6 - land as having no subdivisional potential in the near future because of the costs. There would be substantial costs for roads, bridges and other services. He believes it could well be $2 million before the first allotments were sold. In the present financial climate with interest rates, it would be a foolhardy exercise. Dealing with the business of forestry, he says that when he bought the land some ten (10) years ago it had a lot of good timber growing on it. It had been felled in 1938 and 1939 and has remained untouched since that time until he commenced his activities. He said the land is fenced and fire breaks have been cut around the area with some control burning to prevent fires coming into the timbered area. Mr. Duncombe gave evidence about the business activities and it would appear, although the evidence is not quite clear, that assisted by his son, he controls the activities arid may indicate to the persons cutting the timber where such activity should take place. He was asked in cross- examination of the expenditure under the heading of maintenance. He says that he employs a person with a tractor and slasher to knock down the grass and then burn back to stop bush fires. Further cross-examination did not clarify what outlay was involved in harvesting .the timber for sale and who actually paid for this. Evidence for the Valuer-General was given by valuer, Mr G.J. Dunn, who, in his written valuation, describes the land as easy to moderate sloping forest ridges cut by gullies with access by a formed gravel road via West Ira Buckby Road off Winn Road to the south-western boundary. There is a partly surveyed road off West Ira Buckby Road to the north-western boundary of the subject land. East Ira Buckby Road is a non-formed surveyed road to the south-eastern boundary. It is encumbered with an electricity transmission line easement in the north-western part of the land. He says that town water, electricity and telephone are available. The land is zoned "Future Rural" in the relevant Town Plan gazetted on 14th May, 1988, just after the relevant date. -- 6 of 12 -- - Page 7 - Mr Dunn speaks of the subdivisional activity which has been occurring in this general area with an increase in demand for parcels selling between $50,000 and $70,000 with areas of 6,000 to 8,000 square metres. He_says that in the first instance he considered that the best point of access would be on Ira Buckby Road travelling west over One Mile Creek. He agrees that it would require a substantial bridge but disagrees on the width of the carriageway of the bridge as expressed by the engineers for the appellant but, in the final result, he looks at the access on the western boundary, both north and south. As to the bridge, his estimate would be for the smaller deck bridge at $300,000. His final approach really was to look to an adjoining property owned by Hardcastle which fronts Samsonvale Road. This property was on the mark~t for $600,000 and, in his view, it would be logical for a prospective purchaser to look at developing that land and then providing free access into the appellant's back lands. The alternative would have been to buy an access strip over Hardcastle's land with the appellant possibly sharing the cost of the road. He believes that developers who are in a position where they can better themselves by coming to some arrangement with adjoining neighbours, would be likely to do just that and says there are court cases which support that view. Mr Dunn says that, having regard to the sales of Selpam land and others which he includes in his valuation, if there was fair and reasonable access with no more problems than the other subdividers in the area, the subject land would be worth around $13,500 per hectare with the reduction from the $14,000 on the·selpam land because of extra costs of getting water to the land. He has then made an allowance because the access is not as easy as his sales. In dealing with the claim that the lands should be valued as exclusively used for the business of primary production, he says that this was not claimed by the appellant before this hearing but he sees the land as being a parcel where there has been no large- scale attempt to harvest timber prior to 1989. There has been no attempt at -- 7 of 12 -- - Page 8 - reafforestation but if it fell to be valued under the provisions of the relevant section, he would have applied $700 per hectare or $50,000. H he were valuing as a site, he would adopt the figure of $250,000 but he cannot agree that the land has no subdivisional potential. In cross-examination, Mr Dunn says that while he makes the statement that town water is available, he has not addressed the possible cost but would estimate it would cost $80,000. He did not anticipate any difficulties with electrical supply but cannot suggest an appropriate figure. He has not considered costs of telephone service but he said the sales were in the same position in that the services were in that vicinity and costs would be incurred in bringing them to the land. In re-examination, Mr Dunn says that he has made further enquiries about the Local Authority requirements for a bridge to cross One Mile Creek and obtained further information on the location of water mains in the vicinity. He says that, on the costing of $80 per .metre as suggested by Mr Duncombe, the water costs taken from Ira Buckby Road would be about $80,000 and from Adams Road about $16,000. He also gave some evidence of costs of obtaining telephone connection and power but this really does not take the matter any further from his original conclusion that all subdivi_ders have these problems to face. He has ascertained that a 7.2 metre bridge would be required across One Mile Creek and that the estimate of costs given by Sir Frank would be the appropriate amount to adopt. Mr Dunn tenders a plan dated 19th May, 1989, of a proposed subdivision in a rezoning application which Mr Hardcastle has submitted to the Local Authority showing a subdivision of his land. The proposed subdivision is for 11 allotments running to the boundary of the subject land taken from a larger parcel. It includes an extension of the existing Adams Road from Samsonvale Road through to about the centre of the northern -- 8 of 12 -- - Page 9 - boundary of the subject land. He says that this backs up his opinion that it is prudent for neighbouring properties to be developed together. This provides a cheaper access for the subject land than the Ira Buckby Road where the. bridge would make a road too expensive to develop. Mr Dunn says that the Hardcastle application has been approved but, so far as he is aware, Mr Hardcastle has not yet accepted the conditions imposed by the Local Authority for such approval. By leave, evidence was given by Mr P.J. Duncombe, a son of the appellant, dealing with the question of availability and costs of different services and the steep nature of much of the subject land which would inhibit subdivisional development. The appellant here comes to the Court with thr~e alternative approaches. The _ first approach contends that the Valuer-General has erred in not valuing the land under the concessional valuation of Section ll(l)(vii) of the Valuation of Land Act because the land is used exclusively for the business of primary production. The only figures tendered to the Court show that for the seven (7) years from 1982 to 1988, the sum of $19,774 was received as income from the sale of timber. In three of those years no income was received. The only details of any expenditure is in respect of maintenance in the sum of $12,728 for that period but no cost in 1986. On these bare figures, the enterprise shows a net return of $7,046 but this is not the whole picture. This expenditure apparently is to employ a person to maintain firebreaks around the property. No particulars are shown of outgoings for rates, Land Tax or expenditure in the actual business itself of harvesting timber, if there be any such expenses. This matter can be easily disposed of and I do not propose to consider if the business is one of forestry within the definition of the Act. It is sufficient to say that the scale of the activities in the period up to the date of valuation were such and I hold that they did not have the significance to constitute a business. An owner who seeks to obtain a concessional valuation should take appropriate -- 9 of 12 -- - 'Page 10 ~ steps to place the facts supporting the application before the Valuer-General. As was said by the Land Appeal Court in W,H. Bowden v. The Valuer-General - Shire of Pine Rivers (V89-476) (1980/81) 7 Q.L.C.R. 138 at page 148 - The facts entitling an owner to the concession may often be not obvious on inspection. They may be to a substantial (perhaps exclusive) extent, within the knowledge only of the owner. It therefore behoves owners, we think, to acquaint valuers with the facts that may entitle them to the concession. They should not sit idly by expecting the concession will automatically apply. We used the term 'frank co-operation' in our judgment and we did so advisedly. It would place an intolerable burden on the Valuer-General's staff if they had to make detailed and prolonged enquiries in the first instance to ensure whether or not the concession operated in favour of particular owners. The procedure of an objection conference as a preliminary to appeal seems most appropriate in these somewhat special circumstances. " The next submission is that the land should be valued as a parcel only suitable as a rural homesite. It cannot attract the concession available under Section ll(l)(vii) of the Act which is given to land exclusively used for purposes of single dwelling house as there is no dwelling upon it. As a parcel of land I find that it does have a higher and better use than for one single dwelling and this submission is rejected. On the whole of the evidence, I find that the Valuer-General has correctly valued this parcel of land for its highest and best use and that this highest and best use as would be perceived in the market place is as a large parcel of land suitable for subdivision into large homesites. I accept the evidence of Sir Frank that it would be necessary to expand the sum of $550,000 to construct a bridge over One Mile Creek to gain access to Ira Buckby Road and his conclusion that such a cost would be prohibitive. This is . now accepted by Mr Dunn after making his fu.rther investigations confirming the bridge width requirements. This then places the land as one with legal access off Winn Road into West Ira Buckby Road as described by Mr Dunn which would give access to the south- west corner of the subject land and also the prospect of access by an unformed partly- surveyed road off West Ira Buckby Road·across Portion 25V to the north-western corner. While this circuitous route from Samsonvale Road down Winn Road and thence by West Ira Buckby Road is a long one, it is the only legal access presently available. -- 10 of 12 -- - Page 11 - It would appear on the evidence that Mr Dunn places major importance on the prospect of gaining access off Samsonvale Road down Adams Road in the north by coming to some agreement with Mr Hardcastle for access through his property. He derives comfort for his conclusion by perusing the proposed subdivision of the Hardcastle land suggesting a road connecting to the boundary of the subject land. He concedes this plan was drawn some twelve (12) months after the relevant date and the owner has not yet accepted it. It is the case for the Valuer-General that it would be feasible for a prudent owner of the subject land to act in concert with the owner of the Hardcastle land in such a way as to best realise the potential of both of their parcels and this is the proper approach to determine the unimproved value of the subject land at the relevant date. Counsel refers me to Lucas v. Chesterfield G as and Water Board (1908) 1 K.B. 16 where, at page 33, Fletcher Moulton, L.J. said - The first point arises from the fact that the lands in question do not include the whole of the site necessary for the proposed resetvoir. Two other pieces of land must go to form the reseivoir, and it is argued by the appellants that in such a case no special adaptability exists. If the lands necessary for a resetv0ir, which taken as a whole possess special adaptability for that purpose, belong to A, B and C, then none of these owners can claim in respect of it, because the consent of the other two is needed to enable that special adaptability to be utilised, and such consent might not be given. In my opinion this contention is wholly wrong. In actual life people as a rule act in a way which they believe will conduce most to the advancement of their own interests, and owners in such a case would thus not throw away the enhancement of values in which they would all share. • He also refers me to a decision of my learned colleague, Mr Carter, in Crerar and Others v. The Valuer-General (V84-182 and others) where he dealt with the question whether access could be obtained by the owners of four parcels of land by taking easements over one another's parcels in which he said - It occurs to me and I so find that each of the appellants, if prudent when marketing their land as at the relevant date, would give favourable consideration to the dedication of access easements as outlined in evidence by Mr Ellis. This would enable them to market each of the sites to its best advantage. " -- 11 of 12 -- ., - Page 12 - Those matters concerned owners who could benefit by entering into some sort of arrangement with neighbours. In this case, there is no evidence to show how Mr Hardcastle could benefit in any way by granting access to the subject land through his land. He wishes to subdivide his land and sell the allotments. It would seem imprudent for him to allow a competitor access through his land until such time as he had disposed of his allotments rather than allowing a competing developer to put allotments in the market place at the same time. The best view which one could adopt would be that he would require some substantial recompense for allowing such competition. On the whole of the evidence I find that at the relevant date a prudent purchaser would not view the land as having no reasonable acc_ess point as advanced for the appellant. He would view the subject land as having access only on the western boundary by roads far removed from the subdivisional activities of the general area and for such reasons would find it substantially inferior to the englobo sales used as a basis of valuation here. If he did consider access from the northern boundary, he would weigh the cost of crossing gullies in Hardcastle's land and what premium that person might seek for the privilege of undertaking a subdivision with access by his road. I find that the subject land should be valued at substantially less than the value which has been applied to the Selpam land and I propose to adopt a value of $550,000 as the unimproved value of the subject land as at 31st March, 1988. It well may be that future events will show that access through Adams Road to Samsonvale Road is a reality and this factor can be taken into account in an annual valuation. The appeal is allowed, the valuation of the Valuei.--General is set aside and the unimproved value of the subject land is determined at Five Hundred and Fifty Thousand Dollars ($550,000). (D.J. Barry) President of the Land Court -- 12 of 12 --