Brown v Department of Natural Resources and Mines
[2005] QLC 39
•13 July 2005
LAND COURT OF QUEENSLAND
CITATION: Brown v Department of Natural Resources and Mines [2005] QLC 0039 PARTIES: Gladys M and Raymond C Brown
(appellants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO: AV2004/0116 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 13 July 2005 DELIVERED AT: Brisbane HEARD AT: Cairns MEMBER: Mr RS Jones ORDER: Appeal dismissed. CATCHWORDS: Appeal against unimproved value of land - Valuation of Land Act 1944 - Unimproved value of a special lease APPEARANCES: Mr RC Brown, in person, for the appellants
Mr DJ Grealy of Counsel for the respondent
Background
This appeal concerns land located in Armanasco Road, Bramston Beach, more properly described as Lot 98 on Crown Plan NR 7675, Parish of Russell, County of Nares, containing an area of about 1.82 ha. The appellants occupy the land pursuant to Special Lease 9/47893 which was issued on 1 October 1985 for a 20-year term expiring 30 September 2005. The lease is for residential purposes.
The land is situated on the fringes of the beachside village of Bramston Beach which is located approximately 82 km by road south of the Cairns CBD. The nearest town with reasonable shopping and public amenities is Innisfail which is some 29 km further to the south.
Telephone and electricity are available for connection within Bramston Beach however, sewerage is not available. It would appear that at one time electricity had been connected to the land but has since been disconnected. Also, as I understand it, reticulated water has never been connected to the land and, to be connected, would require some 480 m of water mains to be put into place.
The land is generally of a rectangular shape having an extensive frontage of some 600 m to Armanasco Road. The land slopes upwards from east to west and approximately 75% of the land comprises of steep to very steep ridge lines which are heavily vegetated. The balance area of approximately 25% comprises of near level to gently undulating land vegetated with scrubby coastal forest with significant regrowth. A significant part of this flatter land is low lying and likely to experience inundation and bogginess during the wet season. The only material structural improvements on the land comprise of a dilapidated shed and some flood mitigation works carried out by the appellants.
The appellants have appealed the respondent's assessment of the unimproved value of the land determined as at 1 October 2002 (effective 30 June 2003) in the amount of $65,000. In their Notice of Appeal the appellants estimated the unimproved value as at 1 October 2002 to be $25,000. In their Notice of Appeal under the heading "Grounds of Appeal" the following matters were identified as being relevant to the appeal by the appellants:
"Nature Conservation Act 1992 Section 123.
Denial of improvements to 75% of area. Balance mostly flood prone.
Fill required to build platform. Health risks by typhus. No practical access. No water. Overgrown. Improvements to alleviate flooding."The case for the appellants was presented by Mr Brown who was also the only witness called to give evidence on their behalf. The respondent was legally represented and relied on the evidence of Mr Shaun Glover, a registered valuer employed by the respondent. While Mr Glover did not originally set the unimproved value of the land, he had carried out an independent valuation which he considered confirmed the unimproved value set at $65,000.
The Valuation of Land Act 1944
As mentioned above, the land is subject to a Special Lease thus requiring consideration of s.14 of the Valuation of Land Act 1944 (VLA). Section 14 relevantly provides:
"(1)For the purpose of deciding the unimproved value of land that is not granted in fee simple, the land is taken to be land granted in fee simple.
(2)In deciding the unimproved value of land held under a lease from the State that is subject to a restriction, limitation or other onerous covenant or condition, the chief executive must not take into account the restriction, limitation, covenant or condition.
…
(5) In making, under this part, the valuation of the unimproved value of any land -
…
(b)in a lease, licence, permit or permission to occupy under the Land Act 1994 or granted or issued by the coordinator-general or the chief executive of the department responsible for the administration of the Forestry Act 1959; or
…
the unimproved value of that land shall be determined having regard to and making proper allowance for any restriction or limitation of use having regard to the purpose and conditions to which that permit, lease, licence permission to occupy, agreement or determination is subject."
Mr Glover, the valuer called by the respondent, gave evidence that when valuing the land he had regard to s.14 and the relevant terms and conditions of the Special Lease. This evidence of Mr Glover was not challenged by the appellants. Also, as revealed in paragraph [5] above, any restrictions and/or limitations imposed on the land as a consequence of the lease were not matters raised in the appeal.
Pursuant to s.33 of the VLA, the appellant has the burden of proving that the valuations appealed against are wrong. Further, pursuant to s.45(4), the burden of proving every ground of appeal lies with the appellant. The presumption in favour of the correctness of the valuation may, however, be rebutted where it can be shown that it was based on a wrong principle and/or involved a serious error of fact and/or was made by a fundamentally erroneous method: Brisbane City Council v Valuer-General (1977-78) 140 CLR 41 at 56-57; G Cominos & Co Pty Ltd v Chief Executive, Department of Lands (1996-97) 16 QLCR 311 at 331-332 (LAC).
Issues in the Appeal
(a)Section 14(2) and (5) of the Valuation of Land Act 1944
Following the hearing of the appeal in Cairns the parties made further submissions in writing concerning the construction of s.14(2) and s.14(5)(b) of the VLA. These written submissions were a consequence of my raising with Mr Grealy, during his oral submissions, what I then perceived to be a tension or contradiction between s.14(2) and s.14(5)(b).
Mr Grealy on behalf of the respondent, in his written submissions, said in respect of s.14(1) and (2):
"… It is submitted that the meaning of sections 14(1) and (2) is clear with the effect that the subject land is to be valued as land granted in fee simple and the fact that the lease is subject to a fixed term and (subject to Section 14(5)) is subject to certain conditions is not to be taken into account for the purposes of the valuation. …"
and later concerning s.14(5)(b):
"… It is submitted that this section would only affect a valuation if the relevant lease contained a restriction on the use of the land for the purpose the lease was granted i.e. in this case the use of the land for residential purposes. …"
The appellants agreed with the meaning and intent given to s.14(1) and (2) by Mr Grealy. However, they did not agree with Mr Grealy's construction of s.14(5)(b) and, by submission put forward the following argument:
"Quite clearly Section 14(2) applies to those leases containing a restriction or limitation in the lease conditions such restriction must not be considered in arriving at the unimproved valuation.
Section 14(5) applies where the land is restricted or limited by factors arising outside of the lease conditions. The valuation of our lease must take into account or allow for restrictions or limitations imposed by Local Authorities critical regulatory regime related to the development Control Planning Scheme, including the significant impediments and restriction to use of much of the lease, as a consequence of the area being mapped remnant endangered and remnant of concern and essential Habitat areas, identified within the Regional Ecosystem Mapping embracing the Vegetation Management Act and Nature Conservation Act, leaving options of building platform at base of hillslopes and or North Eastern corner, as a construction site, requiring fill for a safe, serviceable and adequate utility without ocean views.
If Mr Grealy is correct it would mean that a lease for residential purposes granted over land which could not be built on e.g. flood Etc. must be valued as if it could be built on. This cannot be the intent of the legislation."
Before proceeding any further on this topic it is necessary to point out that the construction of s.14(5)(b) in the circumstances of this appeal is academic. That is so because, in my view, none of the grounds of appeal identified by the appellants in their Notice of Appeal could be said to fairly raise the terms and conditions of the Special Lease as issues in the appeal. Section 45(4) of the VLA limits the appellants, in appeals such as this, to the subject matter stated by them in grounds of appeal to be in issue in the appeal.
Notwithstanding the academic nature of any further discussion on this topic, I consider it desirable to deal with it in circumstances where the appellants here are self-represented and went to the trouble of providing me with written submissions. Further, I was rather surprised to find that there had been little discussion of these subsections, at least by this Court.
In my view the construction given to those subsections by Mr Grealy is correct. Despite the argument put forward on behalf of the appellants, it is my clear view that s.14(5)(b) does not apply, to use the appellants' words, "… where the land is restricted or limited by factors arising outside of the lease conditions. …". That of course is not to say that the matters raised by the appellants by way of examples are not to be taken into account in the valuation process. Generally speaking they would be taken into account in the valuation process but quite independently of s.14(5)(b).
In my view, s.14(5)(b) operates to require the valuer, when valuing the land, to take into account conditions in the lease which limit or restrict the use or uses permitted under the relevant lease, permit or licence but to otherwise ignore, pursuant to s.14(2), conditions which do not affect use regardless of how restrictive or onerous they might otherwise be.[1]
[1] Such a construction appears to be consistent with the reasoning of the now President of this Court, Mr Trickett, in the unreported decision of Wright v Chief Executive, Department of Lands (AV95-542; 31 May 1996)
To take a hypothetical example, assume a special lease for residential purposes which, among its conditions had onerous conditions dealing with rental increases and rights of renewal. Further conditions placed onerous restrictions and/or limitations on the location of and materials which had to be used for any dwelling built on the land. In valuing the special lease for the purposes of the VLA, consideration of the first class of conditions is, in my view, prevented by virtue of the operation of s.14(2). However, the second class of conditions are required to be considered by virtue of the operation of s.14(5)(b) because they could have a limiting or restrictive effect on the ability to use the land for the express purpose the special lease was granted namely residential use.
For these reasons I would reject the construction of s.14(5)(b) contended for by the appellants.
(b)Health risks associated with the land
Apart from a "scrub Typhus" event said to have occurred at Bramston Beach some 50 years ago, no evidence whatsoever was called to sustain this ground of appeal. Accordingly, this ground of appeal is dismissed.
(c)Lack of water
Mr Brown gave evidence to the effect that to have town water connected to the land would require the laying of some 480 m of mains along Armanasco Road. Depending on the size of the mains required, the cost of providing water to the land could be anywhere between $7,000 and $14,000. This part of Mr Brown's evidence was not seriously challenged. However, in his evidence-in-chief, Mr Glover explained that when he valued the land he took into account those services and amenities which were or were not available to the land. Mr Glover also pointed out that in arriving at the value attributed to the land, he saw his Sale 3 as being one of the more relevant sales and that it involved land which was not connected to the town water system.
Given Mr Glover's evidence, while I am prepared to accept the appellants' evidence concerning the cost of water connection, it appears to me that this was a matter properly taken into account and dealt with in the valuation process by the respondent. Accordingly, I dismiss this ground of appeal.
(d)Approximately 25% of the flatter land was flood prone
There is no doubt that this matter was taken into account by Mr Glover in the valuation process. At p.3 of his valuation report (Exhibit 4) under the heading "Nature of Land" Mr Glover made the following observation:
"Approximately 25% of the property is near level to gently undulating with sandy soils and vegetated with scrubby coastal forest comprising regrowth wattle, paperbark, Moreton Bay ash and pink bloodwood. Much of this area has been cleared in the past and now comprises heavy regrowth. This area is relatively low lying and I have been informed that it experiences inundation/bogginess during the wet season. A pad would likely be required before constructing a residence in this section. …"
From my understanding of the evidence of Mr Brown, he and Mr Glover have very similar views as to the nature of that part of the land which is not steeply sloping. In circumstances where the potential of the land to be inundated has been clearly taken into account in the valuation process, and there is no probative evidence to the contrary, it is appropriate to also dismiss this ground of appeal.
(e)Fill required to build platform
Mr Brown gave evidence consistent with that of Mr Glover, namely that if a building was to be built on the flatter and lower lying 25% of the land it was likely that a building pad would be required. According to Mr Brown, it would cost in the order of $23,350 plus GST to carry out the earthworks required to establish such a building pad.[2]
[2] Refer to Ex 6 and Ex 7.
This evidence was not seriously challenged by the respondent. Rather, the thrust of Mr Glover's evidence was that the prudent purchaser would not build on the lower lying land but would select a building site on the steeper part of the land. I did not understand Mr Brown to disagree with the logic of this. However, Mr Brown was of the view that it was not likely that approval would be granted for any building on the steeper timbered part of the land.
For reasons which I will come to, I do not accept that the erection of a house on the steeper land would be prohibited or even unlikely.
In all the circumstances, I am also of the opinion that this ground of appeal ought to be dismissed for at least two reasons. First, it is clear that Mr Glover had regard to the possibility of a building pad being required if residential works were to occur on the lower lying land. Second, alternate sites were available which would avoid the necessity to carry out such earthworks.
(f)Denial of improvements to 75% of the land
It was the view of Mr Brown that a dwelling could only be constructed on the lower lying land. This view seemed to be particularly based on discussions with officers of the Cairns City Council and/or government departments including the Department of Natural Resources and Mines and the Wet Tropics Management Authority and, perhaps more importantly, the Hillslopes Development Control Plan ("Hillslopes DCP") of the Cairns City Council.
The evidence concerning discussions with and correspondence between the appellant and various government and council officers is, in my view, too general and vague to support this ground of appeal.
In respect of the Hillslopes DCP, as I understood Mr Brown's evidence, his concerns about being able to erect a dwelling on the steeper 75% of the land principally stemmed from two sources. First, that because of slope, the land fell into Category C of the Hillslopes DCP. Second, that even if the land fell within Category B of the Hillslopes DCP it was unlikely that approval would be given to carry out the clearing necessary to facilitate the erection of a dwelling.
Within the Hillslopes DCP, Category B land is designated "Constrained" while Category C is designated "Restricted". The relevant part of the Hillslopes DCP states:
"1.4.2. Category B - Constrained
Land within this designation has been identified, by various factors, as being constrained to varying degrees for future development.
It is considered however that land designated as Category B and located adjacent to the Urban designation on the Strategic Plan Map Diagram A.1 may have opportunities for certain forms of development, provided that any such development would meet particular performance standards designed to ensure that the intent of this Development Control Plan is maintained. For development to be approved in this category, the applicant will need to demonstrate to Council that the land can be made safe and serviceable for the proposed use without resort to, in Council's opinion:
(i)complex engineering solutions to overcome the constraints;
(ii)the undertaking of anything more than minor earthworks; or
(iii)the need for controls, to ensure that there is no change to the landscape or scenic value of the area, to be placed upon the land use, in excess of those available in the Planning Scheme or Local Laws.
Land designated as Category B but not located adjacent to the Urban designation on the Strategic Plan Map Diagram 1 may comprise both land suitable for development subject to the above proviso and land not suitable for development. The process of determining the extent of land unsuitable for development will occur at the time of a development application or, where applicable, by mutual agreement between the landowner and Council as set out in Hillslopes Objective 9.
1.4.3.Category C - Restricted
This designation identifies land which is either located in the designated urban growth corridors or other areas nominated through mutual agreement with the particular land owner and Council pursuant to Hillslopes Objective 9 and is generally so constrained by various factors, principally landscape and visual quality, slope (generally greater than 1:3) and slope stability, as to be unsuitable for development. The intent of this designation is to retain these areas in their natural state or for these areas to be rehabilitated, where considered necessary by Council."
As I understand the evidence of Mr Brown, his concerns were that due to the nature of the native timber and/or the slope of the steeper land, it would be considered unsuitable for development by the Cairns City Council. While I do not doubt that Mr Brown's concerns are genuinely held by him I do not consider that the evidence, when considered objectively, supports those concerns.
Sheet 14 of the Hillslopes DCP[3] shows about 75% of the land within the boundaries of Category B. Mr Glover gave evidence that he had spoken to a Mr Boyd from the Cairns City Council who confirmed the land mapping was Category B. The consequence of being designated Category B is that specific council approval is required and that would not be forthcoming unless certain factors and criteria were satisfactorily addressed in any development application.
[3] contained in Ex 4.
Mr Glover's evidence was to the clear effect that his investigations led him to be confident that there were no real obstacles to the approval of the construction of a dwelling on the steeper land, provided the necessary application process was addressed properly and competently. I accept this evidence. I also accept the evidence of Mr Glover that there were areas of land large enough to accommodate a dwelling of less than a 1 in 3 slope and that there were no impediments to clearing which could defeat the erection of a dwelling on that part of the land.
I also note that in valuing the land Mr Glover had regard to two sales (Sales 3 and 4) which contained areas of Category B land. On one of these sales construction work for a dwelling within the Category B designated land has already occurred.
On balance, I do not accept that a prudent purchaser would treat the steeper 75% of the land as being unavailable for a residential dwelling. Instead, I accept that the prudent purchaser and vendor would, knowing 75% of the land to be designated Category B, hold the view that a properly considered and competent application to the Cairns City Council and for that matter any other relevant authority or agency, would be likely to succeed.
The fact that the land is designated Category B does of course carry risks of approval which would not be associated with land designated Category A. Category A land is that land within the hillslopes of Cairns identified as being the preferred location for further development. Such risks could reasonably be expected to affect the value of the land. However, in this regard, Mr Glover gave clear evidence that the categorisation of the land was a matter to which he had specific regard when assessing the unimproved value of the land. As I have already mentioned, two of the sales Mr Glover relied on as evidence of value also contained areas of Category B land.
For the reasons canvassed above I also dismiss this ground of the appeal.
(g)Access
There is no doubting that access to the land from Armanasco Road is a real problem, in fact two-wheel drive access to the land from Armanasco Road is not practical. From what appears to be uncontroversial evidence, practical access is gained to the land via adjoining unallocated State land. I have no doubt that access arrangements such as this would weigh heavily on the mind of any person interested in purchasing the land.
Mr Glover clearly agrees that access is a real problem. At pages 5-6 of his valuation report, Mr Glover states in part;
"I acknowledge that the subject has poor access. The difficulty presented to me is what a willing person would be prepared to pay acknowledging that access, the risks associated with using the practical access, and the likely costs that may have to be incurred should a crossing need to be made of the gully on Armanasco Road.
However, I have erred in favour of the lessee and allowance has been made in the valuation regarding cost of construction of access along Armanasco Road including a culvert."
This evidence was effectively confirmed by Mr Glover in his evidence-in-chief and, while raised in cross-examination by Mr Brown, was not seriously challenged.
On balance, I am of the view that there is insufficient evidence before me to conclude other than that the access problems associated with the land had been properly taken into account in the valuation process. Accordingly, this ground of appeal must also be dismissed.
Other matters were raised in the Notice of Appeal being s.123 of the Nature Conservation Act 1992 and the overgrown nature of part of the land. In my view the appellants did not put forward any probative evidence or legal argument to support these grounds and therefore they must be dismissed.
Valuation of Mr Stewart (Exhibit 3)
Before concluding, I feel that I should make some reference to the valuation report of a Mr Stewart who describes himself as a "consulting valuer, surveyor and planner" which was tendered by Mr Brown during the course of the appeal. Mr Stewart was not called and very little reference was made to this report during the conduct of the appeal. In the circumstances, I am not prepared to give any weight to this valuation report. At p.25 of his report, Mr Stewart states that the value of the land has been determined on the basis of only 5,000 m² of the lower land having any value. That is the balance of about 1.3 ha of land is either ignored or given no value. Further, it would appear that in arriving at his value for the land, Mr Stewart had no regard to the operation of s.14 of the VLA. At p.26 of Exhibit 3 Mr Stewart asserts in part:
"All the sale lands are of a secure freehold title, whereas the subject land is not, being lease lands with only some four years left in its term and there is a strong probability, only a small part in the lower section could be converted into freehold.
In essence the overall lease area, has little value, but being on the optimistic side, and taking into account all the discussed parameters, an assessed fair and reasonable unimproved value for the lease area, as being a nominal $20,000."
In the absence of explanation and clarification, which I seriously doubt would have occurred in any event, this valuation report is of no value to me in trying to determine the unimproved value of the land at the relevant date.
Conclusions and Orders
For the reasons canvassed above all of the grounds of appeal raised by the appellants fail.
Accordingly, the appeal is dismissed and the respondent's determination of the unimproved value of the land is affirmed.
RS JONES
MEMBER OF THE LAND COURT
0
0
0