Drury v Minister for Lands [1993] QLC 82

LAND COURT, BRISBANE. 25th June, 1993. Re: Determination of the unimproved value of the land comprised in Worker's Homestead Perpetual Town Lease No. 2433, for the purpose of conversion of tenure of the lease to a freeholding tenure. Lessee: Anthon y Leslie DRURY DECISION On 4th January, 1992 the Department of Housing and Local Government received an application from Mr Drury to have the lease converted to a freeholding lease, including a covenant entitling him to a deed of grant in fee simple. Mr Drury was advised that the purchasing price of the land comprised in the lease as determined by the Queensland Housing Commission in accordance with s.5(2) of the State Housing (Freeholding of Land) Act 1957 was $75,000. However, Mr . . Drury requested that the unimproved value of the land be determined by the Land Court, as provided for in s.5(2)(a)(iii) of that Act. By letter dated 30th November, 1992, the Department of Housing Local Government and Planning requested that the unimproved value be determined by the Land Court. Workers Home Perpetual Town Lease No. 2433 is now described as Lot 403 on RP 12486, Parish of Bulimba and contains an area of 819 square metres. It is situated at 118 Barton Road Hawthorne, approximately 3 kilometres east of the Brisbane Central Business District. Easy and direct access to the property is via Barton Road, a two-way sealed bitumen carriageway with concrete kerb and [1993] QLC 82 -- 1 of 7 -- 2 channelling. Mr Vern Di Salvo, Senior Valuer employed by the Department of Lands, gave evidence on behalf of the Department of Housing Local Government and Planning. Mr Di Salvo tendered a statement which described the land as a rectangular shaped inside allotment, with a frontage to Barton Road of 20 metres. It is a low lying site below street level and is subject to flooding. Mr Di Salvo's investigations indicate that flood levels reach about 1 metre over the majority of the allotment, with the worst affected areas being in the eastern and south-eastern parts. The flooding occurs periodically as a result of a combination of backup from king tides and torrential rain. Mr Di Salvo goes on to point out that following the construction of the Wivenhoe Dam, the Brisbane City Council records show that the properties in this area at the level of 2.4 AHO or lower will be subject to flooding. The lowest point on the subject land is at 2.2 AHO and the highest at 2.4 AHO. Mr Di Salvo said that this indicates that the anticipated level of flood of the subject land at its lowest point, has been reduced from about 1.2 metres to 0.2 metre. Mr Di Salvo's report states that situated on the land is a two bedroom, highset, weatherboard and timber residential dwelling, with galvanised iron roof and timber casement windows. Electricity, water, sewerage and telephone services are connected to the property and Brisbane City Council buses operate regularly along Hawthorne, Oxford and Riding Roads, within a distance of about 500 metres to 1 -- 2 of 7 -- 3 kilometre, with the nearest railway station being at Morningside, approximately 2 kilometres to the south-east. Mr Di Salvo explained that when he first valued the subject land, he proceeded on the assumption that it consisted of Lots 403 & 404. He therefore assessed the unimproved value on the basis of two residential lots each of 409 square metres, as he was required to assess the unimproved value as defined in s.5(1) of the State Housing (Freeholding of Land) Act 1957 which states that; "For the purposes of this section, the unimproved value of land shall be the amount which experienced persons would be willing to pay for the fee-simple of the land, assuming that it were unimproved and were offered for sale on such reasonable terms and conditions as a bona fide seller would require." Mr Di Salvo said that he was not under the restrictions that he would have been if valuing under the provisions of the Valuation of Land Act, whereby section 11 (1) (vii) of that Act would require that such lots be valued as one parcel. He therefore valued the subject land as comprising 2 lots, both capable of separate development and then made an allowance for bulk. However, on the day before the hearing Mr Di Salvo obtained a copy of the instrument of lease and discovered that the subject land is now described as Lot 403 on RP 12486. It appears that on 2nd October, 1991, the Registrar of Titles combined both allotments into one. Mr Di Salvo now considers that his unimproved value of $72,000 based on the two allotments being capable of separate development is inappropriate. He therefore leads evidence to an unimproved value of $66,000, on the basis that the subject land is one allotment of 819 square metres and capable of development by -- 3 of 7 -- 4 a single residential dwelling. In arriving at his valuation, Mr Di Salvo had regard to four sales of land in the vicinity of the subject land. Sale No. 1. has an area of 405 square metres and is zoned Residential A and sold on 29th November, 1991 for $70,000. This land has a moderate slope falling to the north-east. It is a rectangular, elongated, inside allotment which is smaller than the subject land and located adjacent to an industrial area. It is situated approximately 400 metres north of the subject land. This property is well drained and was not flooded in the 1974 flood. Although it backs onto an industrial area and is smaller than the subject land,. Mr Di Salvo considers that it is superior. Sale No. 2. is an allotment of 473 square metres zoned Residential A, which sold on 8th February, 1991 for $55,000. This property is a regular, rectangular shaped allotment which is relatively level, although it falls moderately to the east and slightly to the south-east. Its cul-de-sac location provides a quieter residential environment and although the land is relatively low-lying with associated flood problems, it is not as badly flooded as the subject land. However, it is smaller and therefore Mr Di Salvo considers it to be inferior to the subject land. Sale No. 3. has an area of 402 square metres, zoned Residential A, and sold on 17th May, 1991 for $60,000. This is an inside, level allotment, which falls gently to the rear from the road and is not subject to flooding. It is smaller than the subject land and Mr Di Salvo considers it to be inferior. -- 4 of 7 -- 5 Sale No. 4. has an area of 931 square metres, zoned Residential A, and sold on 4th January, 1990 for $110,000. This is an inside allotment which slopes gently to the rear from the street and has been substantially built up with fill prior to the sale. It is located in a quiet, relatively well elevated street, within close proximity to the Brisbane River. The sale is slightly larger than the subject land and is situated in a superior area, and is not subject to flooding. By comparison with these four sales, Mr Di Salvo considers that an unimproved value of $66,000 is appropriate for the subject land, particularly taking into account the extent of flooding to which the land would still periodically be subject, notwithstanding the construction of the Wivenhoe Dam. Mr A L Drury appeared and gave evidence that his main argument with the report by the Valuer-General is the extent of flooding on the subject land. Mr Drury said that the land is very flood prone and since purchasing it in 1977 he has put in over 2,500 cubic metres of fill and the yard still floods. He said that if the house burnt down he could never build a low set house on the land because of the flooding. Although he did not own the land in 1974, he has been told that the land flooded to a depth of 6 or 7 feet. However, in recent years the land has been subject to severe flooding. This flooding apparently occurs as a result of a king tide backing up at a time when there was heavy rainfall in the area. Mr Drury tendered four photographs which show the extent of the flooding in the backyard of the property -- 5 of 7 -- 6 and under the house. It seems that the flooding under the house occurs as a result of the building up the area of the yard to a level higher than the concrete slab under the house. The result is that water runs under the house and takes from 2 to 3 days to drain away. However, the water drains from the yard in about a day and a half. Mr Drury said that water has been up to 4 ½ to 5 feet under 'the house. The result is that he cannot leave anything valuable beneath the house. The problem can not be alleviated by raising the level of the concrete slab, because then access beneath the house could be very restricted. The only way it could be alleviated is to raise the house itself, which would be very expensive. Mr Drury referred me to an 1982 decision of the then President of the Land Court, Mr W F G Smith, determining the rent of the subject land. He drew my attention to the passage where Mr Smith described the land as being 3 feet below street level. Since then Mr Drury said that he has expended over $2,500 on filling. However, although the land is no longer 3 fee( below road level it still floods. I can appreciate the difficulties that Mr Drury experiences with the flooding of the subject land, particularly the problem of water lying under the house. However, under the definition of unimproved value provided for by s.5(1) of the State Housing (Freeholding of Land) Act 1957, the land has to be valued assuming that it was unimproved and offered for sale on such reasonable terms and conditions as a bona fide seller would require. If it was in an unimproved state the flooding -- 6 of 7 -- • ► 7 difficulties could be alleviated by filling the land. This is the way Mr Di Salvo has approached the valuation. The only issue raised by Mr Drury was the flooding of the subject land. He says that the valuation of $66,000 for the parcel does not sufficiently take this into account. However, I am satisfied that Mr Di Salvo was well aware of the flooding of the subject land and in the surrounding area and has carefully considered the extent of flooding on each of the sale properties. Therefore, I am of the opinion that Mr Di Salvo's revised estimate of the unimproved value as required by s. (5) (1) of the Act is appropriate. Therefore, the unimproved value of Workers Homestead Perpetual Town Lease No. 2433 for the purpose of conversion of the tenure of the lease to freeholding tenure is determined at $66,000. J.J. TRICKETT . MEMBER OF THE LAND COURT. -- 7 of 7 --