Copley v Chief Executive, Department of Lands
[1996] QLC 69
•31 May 1996
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BRISBANE
31 MAY 1996
Re: Appeal against Annual Valuation
Valuation of Land Act 1944
Shire of Beaudesert (AV95-114)
Gregory C Copley and Denise C Copley
v.
Chief Executive, Department of Lands
(Hearing at Beaudesert)
D E C I S I O N
Mr and Mrs Copley are the owners of land described as Lot 31 on Registered Plan 106105, Parish of Maclean, County of Stanley, containing an area of 7.375 ha. Under the provisions of the Valuation of Land Act 1944 (the Act) as at 1 January 1995 the respondent determined the unimproved value of that land at $94,000. An objection by the owners to that valuation was disallowed and they appealed to the Land Court against the respondent’s decision upon their objection, advising that their estimate of the unimproved value was $68,000.
The subject land is situated on the north bank of the Logan River at the end of Arthur Road, about 3 km north-east of the Town of Maclean. Access is by means of the single strip bitumen Arthur and Wearing Roads for about 1.3 km to the Bruce Highway. Electricity, telephone and rubbish collection services are available, but no reticulated water supply.
The Logan River forms the southern and eastern boundaries of the subject land for approximately ½ km. The property is somewhat larger than the surrounding properties fronting Arthur Road, which vary in size from about 3 ha to 5 ha. The land comprises gently undulating blue gum flats, falling to steep river banks on the south and the east. Apart from a triangular area fronting Arthur Road on the west, the balance of the land is subject to flooding. During the hearing it was agreed that in a “normal flood” approximately 75% of the land is inundated, while in the major flood of 1974, only a small area of less than 1 ha was not inundated.
At the relevant date the land was zoned “Rural Residential A” under the Town Planning Scheme for the Shire of Beaudesert. It was used for rural residential purposes.
At the hearing Mr GC Copley appeared and gave evidence, while evidence for the respondent was given by Mr WJ Crothers, a registered valuer employed by the Department of Lands.
Several matters became issues in this appeal. The first was in respect of flooding in the Arthur Road area and in particular on the subject land. When making his valuation, Mr Crothers was of the opinion that only about 50% of the land was subject to flooding in a “normal flood”. However, after Mr Copley presented his evidence, which included two video recordings of the severe flooding in January 1974, Mr Crothers accepted that more like 75% of the land would be flooded in a “normal flood”. He also accepted that only a small area of less than 1 ha on the Arthur Road frontage was not inundated in the 1974 flood.
The video evidence presented by Mr Copley showed clearly the extent of the 1974 flood in the subject area when most of Arthur Road was under water. A second video showed the height of water at Maclean which, Mr Copley said, showed that the flood was 2 metres higher than indicated by Council measurements.
Mr Copley was of the opinion that, contrary to the view of the valuer for the Department that having a large rural homesite with approximately ½ km of Logan River frontage made the property an attractive rural residential site, the site suffered from several disadvantages which affected its value. He explained that considerable time and effort was expended each year in eradicating noxious plants, particularly ragweed and green cestrum. Mr Copley said that ragweed cannot be eradicated completely because it is a water-borne plant and infests a large proportion of the subject land each time there was a flood. Although green cestrum did not proliferate to the extent of the ragweed, it was a declared plant. Because it had a large root system it required considerable effort to eradicate it.
Mr Copley said that he does not use chemicals to control the declared plants because they would add to the pollution of the river. He considered it to be already so polluted as to be of some health risk. As well as the chemicals used by land owners, the river was polluted from the secondary treated sewerage from Beaudesert and the outpour from a meatworks and a gelatine plant.
According to Mr Copley, there had been a noticeable drop in the river flow since the construction of the water treatment plant and weir at South Maclean several years ago. During the recent prolonged drought, the river had been dry for weeks at a time. He explained that the appellants did not rely upon the river for domestic supply. They provided for that by large underground rainwater tanks. However, they pump from the river to supply water to their animals and to the garden. When the water reached a certain level, it was no longer possible to pump. Mr Copley was of the opinion that the Logan River is overcommitted because of the demand imposed upon it by the continuing development of residential blocks in the area.
Mr Copley said that he and his wife purchased the subject land in late 1978. Their major concern was that they had enough land above flood level upon which to build a house. From his experience in the area during the 1974 flood, Mr Copley knew that there was over ½ ha of dry land on the property. He said that they were particularly attracted to the block because of the view of the “beautiful sand dunes” on the opposite bank. However, that scene had since been changed dramatically by the extraction of the sand, the area being overgrown so that all they have is a rural outlook.
Mr Copley went on to explain that the house on the subject land was constructed on the small area not subject to flooding, which meant that the river cannot be seen from the house. He felt that the only advantage enjoyed by the subject land was that when the river is running, the appellants are able to pump water for their animals and their garden.
A further issue between the parties was the effect upon the unimproved value of the subject land of the smell from a mushroom farm which had been established by Queensland Mushrooms on land situated about 1 km to the north-west. Apparently the smell comes from fowl manure and other material used in the process of growing mushrooms. Mr Copley said that the smell affects the subject land when the wind is from the north-west. He produced letters from the owners of neighbouring lands to support his evidence.
Mr Crothers said that in making the valuation he was aware of the complaints about the smell. However, on the occasions that he had been in the vicinity of the subject land, he had not experienced it himself. He said that he felt that its effects had been taken into account in the valuation.
Mr Copley said that the mushroom farm had started as a small enterprise in the early 1970s. In 1986 the owners of the mushroom farm lodged an application with the Beaudesert Shire Council to enlarge the operation. Residents of the local area lodged a petition containing over 300 signatures with the Council requesting the removal of the mushroom farm, but to no avail. The enterprise was enlarged in the late 1980s. As well as the offensive smell, Mr Copley said there was some concern about the health effects of the mushroom farm enterprise.
The Sales Evidence
The greatest dispute between the parties was in relation to the sales which should be used as a basis for the valuation. Mr Copley felt that the most comparable sales evidence was from sales of two properties immediately to the north of the subject land with frontage to Arthur Road, both of which backed onto the Logan River.
Lot 33, containing 4.99 ha, sold in December 1994 for $60,000. At the time of sale it was improved with a three bedroom house, shed and other improvements. As at 31 January 1995, the respondent applied an unimproved value of $61,000 to that land.
Mr Copley said that Lot 33 was even more severely flooded than the subject land, being completely inundated in 1974. His video evidence supported this. Even in smaller floods, he said the land is severely flooded. He produced a photograph of the house on Lot 33 taken in February 1991, showing the house to be severely affected by flooding, with water up to the window ledges. He said that he had helped to clean out a foot of mud from the sunken lounge room in the house, in which a ceiling had collapsed as a consequence of the flood. His video evidence showed that the flooding was much worse in 1974, with debris up to a transformer on a power pole at the front of the house.
Mr Copley said that the 1991 flood did not get to the roof of the house, which had been repaired before the sale. That land had a history of flooding, the house being flooded in 1976, in the mid-1980s and whenever there was serious rainfall.
The second sale referred to by Mr Copley was of Lot 32, adjoining the subject land to the north. Lot 32 has an area of 4.768 ha and sold for $77,000 in 1984, improved with a house, sheds and other improvements. Mr Copley said the price was low because the majority of the land was flooded. Lot 32 sold again in January 1989 for $76,300, with the same improvements, which Mr Copley said does not indicate an increase in the value of that land.
Mr Crothers did not rely upon the sales of Lot 32 or Lot 33. He had interviewed one of the purchasers of Lot 33 who advised him of the circumstances surrounding the purchase of the property for $60,000. It appears that Lot 33 had previously sold for $108,000 in January 1994, being purchased as a rental property. However, a succession of bad tenants had almost wrecked the house and it was in poor condition at the time of the sale in December 1994. The purchasers were aware that it was a forced sale and regarded their purchase as a bargain.
Mr Copley made the point that it was strange that the property was sold for $60,000 only 10½ months after the sale for $108,000. He felt that perhaps the purchasers of the property in January 1994 did not know that it was so severely flooded.
It would seem that because Mr Crothers applied $61,000 to Lot 33, he felt that the sale was out of line with the market at the date of valuation. He said that he was aware of the flooding on Lot 33, but perhaps not the full extent of the flooding. He had thought that about 75% of Lot 33 went under water. Similarly, he was not aware of the full extent of the flooding on Lot 32. After hearing Mr Copley’s evidence, he agreed that Lot 32 “would probably go under water and Lot 33 would probably be reasonably similar”, with perhaps a point of higher land in the north-east corner.
However, Mr Crothers said that he would not change the valuations of those two properties or of the subject land. He thought that the valuations took into account the inundation.
It emerged in evidence that Mr Crothers had increased valuations in that area of Beaudesert Shire by increasing the previous valuations by 15%. The previous valuation of the subject land was $82,000. He said that he had sales in the area which were higher and lower. He tried to defend the valuation by including sales that he thought were relevant.
In defending his valuation, Mr Crothers relied upon three sales, all zoned “Rural Residential A”. Sales 1 and 2 are in Nash Road, in an estate situated about 5 km to the south of the subject land, with areas of 2.919 ha and 2.913 respectively. Those two properties sold in November 1993 and July 1994 for $73,000 and $75,000 respectively. Both are regular shaped allotments with frontage to a narrow bitumen strip road and both have some problems in wet weather. However, they do not front the river nor are they subject to flooding. However, Mr Crothers regarded both as being inferior to the subject land.
Mr Crothers’ Sale No. 3 has an area of 1.787 ha and is situated about 5 km west of Jimboomba, with access to the narrow bitumen Candlebark Road. That property fronts the Logan River and comprises undulating creek flats cut by gullies, level with the road at the front and falling to the river. Mr Crothers stated that about 75% of the land is prone to flooding.
Mr Crothers was of the opinion that the sale property is similar to the subject land in country type, location, situation and zoning. However, it is superior in services, which among other things, includes a reticulated water supply (trickle feed water). Because it is much smaller, Mr Crothers regarded the sale as inferior to the subject land.
In Mr Copley’s opinion, Sales 1 and 2, although presently zoned “Rural Residential A”, are shown on the Council’s draft Strategic Plan as “Residential Low Density”, which means that they are able to be subdivided into 4,000 m2 blocks. Mr Copley said that prudent purchasers would have known of that potential even though the Strategic Plan was only at the draft stage. In his opinion, with that subdivisional potential, the sale prices of $73,000 and $75,000 supported his estimate of unimproved value of $68,000 on the subject land.
With regard to Sale 3, Mr Copley said it is situated in a “choice” “Rural Residential A” subdivision. He agreed that there would be flooding on the back area of that land, but the Candlebark Road area was not as badly flooded as the Arthur Road/Wearing Road area, where many houses were flooded. Mr Copley disagreed that Sale No. 3 would be inferior to the subject land. He said it has only a narrow frontage to the Logan River and would not be as badly infested with noxious plants. Of course Sales 1 and 2, not being flooded, would not have that problem.
Mr Crothers agreed with Mr Copley that Sale No. 3 appeared to be situated above the Maclean Weir and would therefore have better access to the flow of river water. He agreed that water is a most important consideration in the value of a rural residential site.
Section 45 of the Act states that the burden of proving any and every ground of appeal shall be upon the owner. I will now consider each of the appellants’ grounds of appeal in relation to the evidence outlined above.
The appellants’ first ground of appeal is in relation to the sale of Lot 33 in Arthur Road for $60,000, only about a month prior to the date of valuation. It is clear that Mr Crothers placed no weight upon that sale as he applied $61,000 to Lot 33. The evidence indicates that Lot 33 has a history of severe flooding. Water has entered the house on a number of occasions. It is also clear that Mr Crothers thought that only about 75% of the property was flooded. He now accepts that it is totally inundated.
While there would seem to be good grounds for Mr Crothers not to use that sale as a basis of valuation, the fact remains that the property sold for only $60,000 with improvements. While that sale price does appear to be somewhat low, there is also the evidence of the sale in January 1989 of Lot 32 for $76,300, also improved with a house and other improvements. Mr Crothers had applied an unimproved value of $86,000 to Lot 32.
These two sales taken together do seem to indicate that there is a market for totally inundated land which is somewhat less than the unimproved values applied to the two sale properties. Taken alone, that evidence would also seem to indicate that the application of $94,000 to the subject land is excessive.
The appellants’ second ground of appeal is in relation to the area of flooded country on the subject land, that it cannot be subdivided and that it produces no income. As Mr Crothers has agreed that the subject land was somewhat more inundated than he originally thought, the appellants have proved that part of their ground of appeal. The other two parts of it were not in dispute.
The appellants’ ground No. 3 is with regard to the problems of removing declared noxious plants from the land each year. Mr Copley’s evidence in this regard was accepted by Mr Crothers and, while there is no evidence of the effect that it would have on the unimproved value of the land, it is something that would be taken into account by a hypothetical potential prudent purchaser in fixing the price that such a purchaser would be prepared to pay for the land.
Ground No. 5 is in respect of the pollution of the river, that it can no longer be used for swimming and recreation. This was also conceded by the respondent and is further evidence that the riverside location of the subject land does not greatly enhance its value. Indeed, the only advantage that is available to the subject land is, as Mr Copley said, that when the river is not dry, some water can be pumped for the animals and for the garden.
Ground No. 6 is in respect of the effect on the unimproved value of the smell from the mushroom farm. Although Mr Crothers was prepared to accept that there is a smell at some times, he had not experienced it himself. He said that he felt that it would have been taken into account in the previous valuation, which he increased by 15% as at 1 January 1995. However, there would appear to be no grounds for Mr Crothers’ belief. I accept that there is a smell from the mushroom farm, but there is no evidence of just what depreciating effect it would have on the unimproved value of the subject land.
The appellants’ final ground of appeal is in respect to other sales in the immediate area. However, apart from the sales of Lots 32 and 33, there was no other direct evidence of sales. Mr Copley did not know the individual lots, the subject of Mr Crothers’ Sales 1, 2 and 3. However, he knew the areas in which they were situated. In my opinion, Mr Copley raised some valid points about the direct comparability of each of those sales, particularly in relation to Sale No. 3. From the discussion of the evidence above, it is quite clear that Sale No. 3 is, in all respects, a superior property to the subject land, except for its size.
It has been held on many occasions by the Land Court and the Land Appeal Court that the basic value of a rural homesite is in the house site itself. Although there is additional value in the balance land, it is not directly proportional to the value of the homesite. Therefore, although the additional area on the subject land must be taken into account, it is the comparison site for site which is most important. While the subject land might be slightly superior to Sale No. 3 because it does have almost 1 ha of dry land, I do not think it is as superior as the respondent’s unimproved values indicate.
I am of the opinion that Mr Copley has basically proved the appellants’ grounds of appeal. The difficulty in this case is just what unimproved value should be applied to the land.
It is clear that the subject land is superior to Lot 32 and Lot 33. I have also formed the opinion that the subject land is superior to Sales 1 and 2. It would also seem that as a basic house site, the site on Sale No. 3 is superior to the house site on the subject land. If a house site of approximately ½ ha was to be regarded as the standard, then Sale No. 3 has a balance area of approximately 1.3 ha, while the subject land has a balance area of approximately 6¾ ha. Although it would appear that the balance land on both sale and subject are inundated in times of flood, in my opinion, the larger area of the subject land cannot be ignored.
Taking all these things into account, I find that the subject land is somewhat superior to the Sale No. 3, but not to the extent of the respondent’s applied unimproved value. I have come to the conclusion that an unimproved value of $85,000 on the subject land would be more appropriate.
Accordingly, the appeal is allowed, the valuation of the respondent is set aside and the unimproved value of the subject land is determined at Eighty-five Thousand Dollars ($85,000).
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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