McCready v Chief Executive, Department of Natural Resources

[1999] QLC 123

[1999] QLC 123

 

LAND COURT

BRISBANE

1 DECEMBER 1999

Re:     AV99-530

An appeal against an unimproved valuation -

Valuation of Land Act 1944 -

Local Authority:        Charters Towers

Elizabeth J McCready

v.

Chief Executive, Department of Natural Resources

(Hearing at Charters Towers)

D E C I S I O N

The appellant owns a parcel of land at 53 Deane Street, Charters Towers, which is improved with a residence, in which she resides, and an outbuilding.  She has appealed to this Court against the valuation placed on that land by the Chief Executive as at a relevant date of 1 October 1998.  The Chief Executive's valuation, of what I will call the "subject land", was originally struck at a level of $27,000, however, following an objection by Miss McCready, the Chief Executive reduced the valuation to $20,000.  Not content with that figure, Miss McCready appealed and contends for a valuation of $12,000.
           Miss McCready appeared on her own behalf and gave extensive and detailed evidence in support of her grounds of appeal, whilst valuation evidence in support of the Chief Executive's figure was supplied through the evidence of Michael Gerard Stephensen, a registered valuer.
           The grounds of appeal were as follows:

"1.Hillside – excessive slope of land – unsellable and unrentable by buyer.

2.Huge rocks preventing development of property.

3.Deep areas which are rapidly subsiding.

4.Crossed by old mining tramline build before 1900.

5.Flooding on two sides; front fence has to be protected by sheets of old iron.

6.Unsuitable for subdivision.

7.Rocks covered by nil or less than 6 inches of soil

(a)        Cannot have underground electricity wiring.

(b)        Cannot have excavations for building.

(c)        Cannot bury water pipes.

(d)Cannot satisfactorily extend sewerage or drainage systems.

(e)        Phone lines are near surface.

(f)          Flooding – 4 feet from properties across road.

8.No rear access; front access is flooded after 15 mm of rain for an hour.

9.          Any top soil placed on rocks is washed away.

10.       Shafts (unregistered) on and under soil.

11.Goldmines have registered mine shaft across the road – it is connected to underground tunnels under my area.

12.       An old cutting, 20 feet or more deep, is subsiding.

13.       House posts are either sinking or balanced on rocks.

14.       There is no level or near-level ground in the whole area.

15.       Day Dawn and other mine lodes are under the ground.

16.       Soil is unsuitable for growing trees and plants.

17.Floors are dangerous split levels under house – 1 stair step – 14 steps on slope with 'umpteen' levels between.

18.       House shakes because of ground mixtures.

19.       Pool is impossible; any grading is impossible.

20.Yard is a danger to children, vehicles and disabled adults. It is derelict."

Mr Stephensen's valuation report says that the subject land has an area of 2,504 m² and is situated 600 metres south of the Charters Towers Central Business District on the eastern side of Deane Street and 60 metres north of that street's intersection with Paull Street.  Charters Towers is located 135 km south-west of Townsville in North Queensland and is a noted mining town with a long history of underground mining for gold. 
           Mr Stephensen said in his report that the subject property has a 53-metre frontage to Deane Street which is bitumen sealed with concrete kerbing and channelling.  Miss McCready was critical of these roadworks, saying that the kerbing was broken in parts.  Mr Stephensen's report went on to say that the subject land has rear unformed access which Miss McCready described as "useless".
           The subject land is serviced by normal urban infrastructure in the form of telephone, power, sewerage and town water, as well as bitumen road access referred to earlier.  Miss McCready said that water pipes are affected by the mineralisation of the soil in Charters Towers, a feature which generally applies to properties in the town.  She said that the installation of underground services, particularly water, power and sewerage, is difficult, if not impossible.  Her house is serviced by overhead powerlines which she described as dangerous.  She referred to an incident when in a strong wind a neighbour's gazebo was moved from its normal position and blown along a nearby laneway until it became lodged into her fence.  She said that she was concerned that such an errant gazebo or similar flying debris may become entangled in the overhead powerline servicing her house, resulting in a dangerous situation arising.  I am aware that overhead electricity lines can break and fall to the ground creating a dangerous situation, however, this method of electricity distribution has been generally employed throughout Australia, particularly in rural regions, for decades and would not, I think, be a feature which would be seen by a prudent purchaser of land to appreciably diminish the land's value.  In any event, it is my understanding that the sales properties referred to by Mr Stephensen in his valuation report, and included later in these reasons, would suffer a similar disability to the extent that the market would see overhead power supply as a disability. 
           Mr Stephensen said in his report that the subject land is a near regular shaped allotment.  Miss McCready took objection to that description, however, it does seem to be an acceptable form of words which describes the shape of the land which is quite apparent to me in the sketch plans provided in evidence.  No doubt a different form of words might be employed by a range of people, however, no real issue arises in the instant case.  Mr Stephensen wrote that the subject land "is very rocky with shallow topsoil with about 800 m² of exposed rock".  Now the presence of rock, both on the surface and below it on the subject land, was a matter which Miss McCready chose to describe at length during her evidence-in-chief.  As part of that evidence she tendered a document entitled "Autobiography of a Clothes Hoist", a most readable document which revealed the trials and tribulations that she had experienced in anchoring into the ground on the subject land a clothes hoist which she might enjoy the use of.  Not only is the rocky nature of the subject land a concern with respect to the installation of a clothes hoist.  As Miss McCready described how it would be difficult to construct a house on the land and said that traversing the land by foot could be dangerous given the uneven nature of the rocky surface.  In addition, there is little soil to support plant growth and her only success in that regard has been the establishment of albizia plants.  Other types of plants die after a period of growth, in Miss McCready's view, once the roots of the plants come in contact with the rock strata just below soil level on those parts of the subject land which have soil, rather than exposed rock.
           Mr Stephensen said that the subject land slopes from south to north, however, Miss McCready described to me what I understood to be a cross-slope as well.  She described how on the uphill corner of the house there was a corner post with a height of about 1 foot, whilst at the downhill side of the house 14 steps are constructed to provide entry into the premises.
           Mr Stephensen wrote in his report that the internal driveway is along ground that was levelled long ago for use as a tramline.  He said that there is some evidence of "minor subsidence" and recorded that Miss McCready suspects there unregistered shallow mine shafts under the land.  Miss McCready told me that a mining inspector by the name of John Banks had told her some years ago that mine shafts were under her land.  I understand that a cement mixer became stuck on the land at one stage in the area of subsidence. 
           Mr Stephensen's report says that the subject land is elevated and offers some views, however, Miss McCready said that nearby houses limit those views.  Mr Stephensen also recorded Miss McCready's advice to him that run-off water enters the subject land during storms.  Miss McCready's evidence was that she had taken an initiative to limit the flow of water onto her land and also from her land to the adjoining lot on the downhill side. 
           Mr Stephensen valued the subject land on the basis of its use as a single dwelling unit.  Miss McCready was critical of the quality of the structure of the house presently on the land and said that construction of a modern house there would be difficult, if not impossible.  She referred to the difficulties experienced in constructing residences at Castle Hill in Townsville where I am aware that either expensive earthworks are required or similarly expensive specialised construction techniques.  She said also that her land would not satisfy a soil test for the purpose of construction, however, there was no evidence in support of that contention.  In any event, disabilities of this nature would similarly be experienced by other properties in Charters Towers, including an adjoining property which Mr Stephensen referred to as his main sale in striking his value of the subject land.  It will be useful if I turn to that sale, however, before I do I think it may be of interest to Miss McCready if I make brief reference to the nature of land valuation.  In considering the question of what a valuation is, reference to two cases may be of assistance, albeit a glimpse only of a larger canvas of the practice and law of valuation.  The practice of land valuation is an exacting one involving not only professional qualifications and skills but also access to relevant market information and experience in the area under consideration.

The first authority that I will refer to is Spencer v. Commonwealth (1907) 5 CLR 418 where, in his judgment, Griffith CJ said at 432:-

"In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, that is, whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?'  It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural.  The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together."

Another useful case is found in River Bank Pty Ltd v Commonwealth (1974) 48 ALJR 483 where the Court said that use of sales evidence was "the conventional valuation" method and in this regard sales of similar land around the relevant date and in the same locality are clearly to be preferred.
           Mr Stephensen referred to four sales in his valuation report.  His Sale No. 1 has an area of 992 m² and sold in March 1998 for $16,000.  Mr Stephensen deducted the value of the improvements in the form of clearing, producing an unimproved figure of $15,400.  That sale property is near level and approximately 2.1 km from the Central Business District of Charters Towers and across the road from the main western railway line.  It is inferior in location and size to the subject land, according to Mr Stephensen, though superior in topography.  Overall he said the Sale 1 land is inferior to the subject property.
           Mr Stephensen's second sale has an area of 1,241 m² and sold in July 1997 for $21,550.  The sale land was cleared and had been improved with an old shed at the time of sale, and after deducting the value of these improvements Mr Stephensen deduced an analysed unimproved figure of $20,050.  That sale property is about 2.8 km from the Central Business District and again is inferior in size and in location, but superior in topography to the subject land.  In Mr Stephensen's view the sale land is slightly superior to the subject property.
           His third sale has an area of 1,182 m² selling in June 1997 for $32,000.  He analysed that sale to an unimproved figure of $30,500.  That property is approximately 100 metres from the Central Business District, so is superior in location, is also superior in topography, though inferior in size to the subject land.  Overall Mr Stephensen concluded that the sale land is superior to the subject property.
           This brings me to Sale 4 which is located at 49 Deane Street, Charters Towers, adjoining the subject land on its downhill side.  That property has an area of 1,938 m² and sold in September 1997 for $15,000.  Mr Stephensen deducted $500 from that sale price to cater for the improvements in the form of clearing and poor fencing on the land, resulting in an unimproved figure of $14,500.  In his view, the Sale 4 land is inferior to the subject property and in his valuation report he referred to size, location and topography as being the features of importance in that comparison.  He described how the Sale 4 land drops steeply away from the road and away from the subject land, but that it is flat towards its rear third, though he suspects it would be boggy in that area following rain.  The sale land would receive overland flow from the subject property.  It has no rear access.  Mr Stephensen was asked by Mr Schy, agent for the Chief Executive, as to whether the degree of slope on the sale land was greater or less than the subject property, however, my appreciation of Mr Stephensen's answer is that he could not confidently say which property was inferior in that regard.  Mr Stephensen said that there was a gully on the sale property, whilst Miss McCready said that that gully also appeared on the subject land.  Her main attack on the Sale 4 transaction was, however, to say that the sale price was too high.  She gathered that opinion following inquiries she made of a real estate agent concerning an auction of the adjoining land some time previously.  Mr Stephensen was unaware of the auction, however, Miss McCready's advice from the agent was that the vendor would be lucky to receive a price in excess of $12,000 for the land.  Perhaps that was the source of Miss McCready's estimate of value for the subject land, but I must say that that is a matter of conjecture on my part, as at no stage did she give evidence as to the provenance of the figure.  She said that the purchasers of the land were not from Charters Towers, however, Mr Stephensen gave evidence that the purchasers had a Charters Towers address prior to purchasing the land.  He also said that he had interviewed the purchasers who said that they would have been willing to pay up to $20,000 for the Sale 4 land.
           Miss McCready referred to 12 properties in Charters Towers close to the subject land and their statutory valuations by the Chief Executive as at 1 October 1998.  The properties referred to were all in Miss McCready's opinion superior to her property in that they had either less rock, were of a more level topography or had some other similar advantage.  Mr Stephensen agreed that each of these properties is superior to the subject land and, indeed, their values reflect that superiority.  This does not, however, take the matter of the value to be placed on the subject land any further as the real question is not one of superiority of these properties over the subject land, but the extent of that superiority and in this regard I am of the view that the sales evidence referred to by Mr Stephensen, in particular his Sale 4, provide the best guide to value. I am supported in this view by the often-cited authority of Clough v. The Valuer-General (1981-82) 8 QLCR 70 at 76 where the Land Appeal Court said this:

"It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value."

In considering all of the evidence concerning the sales properties referred to by Mr Stephensen, I am satisfied that his valuation of the subject land is closer to the mark than the $12,000 figure proposed by Miss McCready.  I think, however, it appropriate to adjust Mr Stephensen's valuation to take into account the evidence of there being suggested mine shafts on the subject land and the view that I have formed that the degree of slope on the subject land is greater than that on the Sale 4 property.  Taking these factors into account, I will allow the appeal and determine the value of the subject land at Eighteen Thousand Dollars ($18,000).

RP SCOTT

MEMBER OF THE LAND COURT