McKenna v Chief Executive, Department of Natural Resources and Mines - [2001] QLC 99

[2001] QLC 99

LAND COURT

BRISBANE

21 September 2001

Re: Appeal against annual valuation

Valuation of Land Act 1944
  Property ID No:        81571
  Local Government:    Redcliffe
  (AV2000-0141)

John L McKenna

Chief Executive, Department of Natural Resources and Mines

J U D G M E N T

Background:
This matter relates to land at 66 Griffith Road, Scarborough, and described as Lot 14 on RP 81679, Parish of Redcliffe. The subject land has an area of 607 m² and access is good to the western side of the land directly from Griffith Road. Access to the eastern side of the subject land is partly restricted to west moving traffic by a double white line separating traffic entering the round-about at the intersection of Griffith Road and Scarborough Road.
The subject land is slightly above street level, and in its natural state falls gently (less than 1 metre) from north-east to south-west. The land is zoned Residential A under the Town Plan of the Redcliffe City Council of 17 April 1996, effective at the date of 1 October 1999. The key issues are the impact of surface water flows, comparison of sales and relativity.
On 27 March 2000 the Chief Executive issued a valuation of the subject land at $48,500. Following an objection the Chief Executive confirmed that figure on 8 June 2000. The appellant has now appealed claiming the unimproved value should more properly be $45,000.
John Louis McKenna appeared and gave evidence on his own behalf. Mr PC Smith appeared for the respondent calling evidence from Gavin John Dunn, the registered departmental valuer responsible for determining the valuation.
The Evidence:
The History of the property –
This matter has been a long standing issue between the parties. A previous appeal came before this Court for the 31 March 1992 valuation (AV93-289). A subsequent appeal (AV94-452) was withdrawn prior to hearing. In all matters the grounds of appeal basically involved the ongoing problems confronting the appellant resulting from overland surface flows, and their impact upon the usability of the land. In the matter of AV93-289, the appellant had contended for an unimproved value of $45,000, similar to the current amount claimed.
It has always been common ground that the subject land is low lying and subject to surface water runoff from properties higher up the slope to the north-east. However those matters were recognised by the Chief Executive, in the appeal AV93-289 valuation, and an allowance and relativity with the surrounding parcels has been maintained in the current matter. The Court rejected the appeal in its decision of 29 April 1994, where the Learned Member noted at page 3:
“Certainly it appears that the subject land receives water to a greater extent than sites in Scarborough Road, but the disability of more traffic noise at the relevant date for properties in Scarborough Road has to be addressed as well.”

During discussions with the respondent on the current matter, Mr McKenna notes a letter from the respondent of 19 August 1999, acknowledging the appellant’s concerns about flooding, and details of those concerns being referred to the valuer for further consideration. It is Mr McKenna’s argument that subsequent changes to relative valuation of parcels (including the subject land) reveal no additional reduction being applied to the subject land in recognition of that flooding problem.
Mr Dunn argues that he had previously made an allowance of $2,000 in the valuations at both 31 March 1992 and at 1 October 1999 for that purpose. Mr Dunn had accepted the flooding problem, and allowed $2,000 for drainage along the property boundaries, involving an agricultural drainage pipe and rubble backfilling. Mr Dunn argues that allowance had been accepted by the Court in 1994.
Mr McKenna argues that he had been unable to get a personal joint inspection of the subject land to discuss the flooding problem after heavy rains. Because of any obvious lack of physical inspection of the subject land, Mr McKenna finds difficulty in accepting that adequate allowance has been made for those disabilities. Mr Dunn rejects that he was unable to adequately assess the impact of flooding, calling upon his long experience in the area (some 33 years), the availability of contour mapping, his previous visits to the site in 1993 and 1994, and his subsequent inspections after heavy rains in February 2000.

The nature of the land -
Mr Dunn provides detailed topographical mapping of the subject land and adjoining parcels in Griffith Road and Scarborough Road. Those maps reveal contours at 1 metre intervals, showing the general fall from north-east to south-west. The contours indicate a fall to the west along Griffith Road from Scarborough Road, and generally support Mr McKenna’s advice that Griffith Road was likely to have been a low area with gully drainage prior to road works.
The contours also support that in its undeveloped state the subject land falls about 0.7 metres from the rear to Griffith Road, and a gentle fall towards the west. The subject land (Lot 14) is slightly higher than the adjoining parcel to the west (Lot 15). However Mr McKenna advises that due to later earthworks during construction of the dwelling upon the subject land, the fall is now towards the subject land.
As a consequence of those earthworks, the appellant finds that the subject land is the concentrating point for surface discharge waters down the slope from the north. However Lot 15 also suffers some surface water flows under the existing high stumped house directly across it to Griffith Road. To minimise surface flows from the now higher Lot 15, Mr McKenna has constructed a concrete line drain along the western boundary of the subject land.
Mr Dunn agrees that the subject land is now the lowest spot in that local area, but argues that has occurred as a result of inappropriate levelling of the subject land for construction purposes.
In considering traffic movements along Scarborough Road and Griffith Road, Mr McKenna argues that both roads are now busy thoroughfares, reflecting the presence of bus routes, and hence the need for a traffic calming round-about at the intersection of the two roads. Both are therefore the subject of traffic noise impacts upon the adjoining parcels, but Mr Dunn argues that Scarborough Road, as the major link between Redcliffe and Scarborough, is the busier roadway. For that reason Mr Dunn has made some additional allowances in the unimproved values of the lots fronting Scarborough Road. However it is agreed that Griffith Road has become increasingly busy as it provides access to K-Mart and Newport Waters.
The impact of overland flows -
The most significant difference between the parties is the recognition of overland flows, and the local flooding that causes to the subject land. Mr Dunn accepts that local flooding is a problem, but argues that in its natural unimproved state the subject land could be protected by a strategy to minimise that impact by constructing drainage around the boundaries. To that end he has allowed for an allowance in the valuation of $2,000 for that purpose.
Mr McKenna recognises that surface flows exist, and he has constructed an open drain about 0.6 metres wide along the western boundary, and a concrete base to the other fencing in order to divert the waters away from the subject land. However the sandy nature of the soil, and an old leaking stormwater pipe about 0.3 metres outside of the eastern boundary, allows overflow waters to flood across the boundaries. In spite of complaints to his political representative, and to the local Council, Mr McKenna has been unable to prevent the intrusion of local flooding from the adjoining Lot 13 to the east.
The cause of the appellant’s concern is really the inadequacy of the existing old glazed earthenware stormwater pipe in Lot 13 (64 Griffith Road) to divert extra surface waters to Griffith Road. That stormwater pipe line was installed many years ago to divert surface waters from Lot 12 (233 Scarborough Road). While the old pipe now has extensive leaks along its length, the major reason for the local flooding would appear to be the additional roof waters now entering the line from three existing sheds on 64 Griffith Road.
From the evidence it would appear that in the late 1980s, prior to the previous appeal in 1993, Mr McKenna sought to divert surface waters from his land by constructing a concrete base to his dividing fence with 64 Griffith Road. Clearly as surface waters started to concentrate on 64 Griffith Road, that owner sought relief by creating an open rain water pit into the old stormwater line. That may have eased the problem for the owner in 64 Griffith Road, but because of hydraulic pressures in the old stormwater line during heavy rains, the system now leaks profusely under the fence’s concrete base, and into the subject land, ponding in the back yard, with no avenue to escape to Griffith Road.
It is also a problem for Mr McKenna that his garage building extends right up to the fence line, allowing no room for a second drainage line on the subject side of the dividing fence line, with 64 Griffith Road. While it is not a matter for this Court, the obvious solution in such circumstances might be the replacement of the old stormwater pipe line with a more robust new pipe, even at the appellant’s cost if necessary, but subject to the agreement of the owner of 64 Griffith Road. However the only matter for resolution in this matter, is really to determine the level of disability now attaching to the unimproved value of the subject land. Mr McKenna estimates the impact of that flooding as a further $3,500 reduction in the unimproved value to $45,000.
Relativity -
In seeking relativity with adjoining parcels, Mr Dunn advises that the applied unimproved values of the subject land ($48,500), Lot 15 to the west ($50,000), and Lot 13 to the east ($46,000) reflect the allowances made for the elevation of those parcels, the relative impact of noise from the heavier traffic along Scarborough Road, and the flooding on the subject land. As the subject land is slightly higher than Lot 15, its unimproved value would be about $500 greater than Lot 15. However the disability of $2,000 for the flooding results in the current difference of $1,500 between the two parcels.
Comparing the adjoining parcels to the north-east at Lot 12, (233 Scarborough Road - $47,500) and Lot 11 (233A Scarborough Road – $48,500), those unimproved values reflect the narrower width of those two parcels, and the greater intrusion of noise from Scarborough Road, in spite of both of those parcels being higher in elevation, and not as affected by surface water.
Mr McKenna draws comparisons with Lot 2 on RP 127997 (67 Griffith Road) on the southern side of Griffith Road. The unimproved value of 67 Griffith Road is the same as the subject land at $48,500, and it does not suffer from similar surface flooding due mainly to the presence of the kerbing and channelling along Griffith Road. However that parcel is about 1 metre lower in elevation, has a narrower frontage, and an irregular shape along the rear boundary. On reflection there is nothing to discredit that comparison.
I note Mr McKenna’s concerns that reductions in relative unimproved values in both Griffith Road and Scarborough Road reveal consistent applications varying between $5,000 (64 Griffith Road), $5,500 (the subject land), $6,000 (68 Griffith Road), and $7,000 (229 Scarborough Road). On that basis he argues that there has been no further recognition of the local flooding of the subject land in recent years. Mr Dunn confirms that opinion noting that the flooding has been included in the old relativities existing at least since the last appeal in 1993. Mr Dunn has not disturbed that relativity, other than some minor rounding up or down when finalising the applied valuations at each revaluation. On that basis I see no reason for concern.

Comparison of sales -
The matter of comparing sales was not challenged by the appellant. Mr Dunn supplies four sales to demonstrate the level of the market in that locality. I will spend little time in examining those sales except to note the following comparisons:

Sale	Date	Price	Applied Unimproved Value	Comparison
(1) – Griffith Road, Scarborough	10/97	$76,000	$66,000	Superior/larger
(2) – Garvey Street, Redcliffe	10/98	$42,000	$34,500	Inferior/smaller
(3) – Garvey Street, Redcliffe	5/99	$38,000	$34,500	Inferior/smaller
(4) – Landsborough Avenue, Scarborough	7/98	$68,500	$57,000	Superior/smaller

It is noted that Sale 3 was a resale of Sale 2, demonstrating the decline in the market of 10% in the relevant period. There is no argument about the quantum of those comparisons, only the final impact of the local flooding of the subject land.
Decision:
In adopting his valuation Mr Dunn has used comparisons with sales of vacant lands in the area. That method has long been approved as the most reliable method of determining the unimproved value. (R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13 at 17). The sales applied support the overall general level of value of the parcels in that area, and that is not disputed by the appellant.
The only issue between the parties is whether there has been an adequate allowance for the impact of flooding, particularly from Lot 13 to the east. Before considering that issue I note that the method of valuing the land is directed by section (3)(1) of the Valuation of Land Act 1944 which relevantly states:
“3(1) For the purposes of this Act -

‘unimproved value’ of land means -

(b) in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for this purposes of this Act, the improvements did not exist.”

In seeking to understand how that direction is to be applied to the subject land, I note guidance by the Privy Council in Tetzner v Colonial Sugar Refining Company Limited (1958) AC 50 where their Lordships said page 57:
“What in Their Lordships’ opinion is required in the present case is the physical improvements, with any value which they attach to the land on which they are situated, be excluded from the valuer’s computation. The land will then be valued as land devoid of building but situated in the community with the amenities and facilities which have grown up around it.”

In simple terms the land is to be treated as if all improvements upon the land had not occurred, while all the existing surrounding developments at the time of the valuation are to be considered to exist in their current form. On that basis the presence of the offending stormwater pipe line on Lot 13, and its current inability to convey all storm waters under pressure to Griffith Road, is to be allowed for.
However the existing buildings upon the subject land, including the garage which is constructed right up to the boundary with Lot 13, is to be taken as if it did not exist. Guidance in that matter was provided by the Privy Council in Tooheys Limited v The Valuer General (1925) AC 439 where their Lordships said at page 443:
“Now, what he has to consider is what the land would fetch as at the date of the valuation if the improvements made had not been made. Words could scarcely be clearer to show that the improvements were to be left entirely out of the view. They are to be taken, not only as non-existent, but as if they never had existed.”

On the above understanding it is therefore appropriate for Mr Dunn to assess the impact of the flooding surface waters upon the subject land in a manner normally adopted in such circumstances. The creation of rubble drains with suitable agricultural drainage pipes is a method regularly adopted to divert surface flows from properties. Mr Dunn’s allowance of $2,000 for such a purpose is a reasonable estimate of the added value of such works, and that has been allowed for in the current valuation. The evidence of the former appeal (AV93-289) supports that an allowance for that purpose already existed in April 1994. Mr Dunn’s evidence is that he has continued to maintain the former relativities with adjoining parcels since that decision by this Court.
In considering the relative values of Lot 15 to the west and the subject land, I believe that Lot 15 being slightly lower in its natural state would be slightly of lesser value than the subject land, without the extra disability to the subject land of the flooding from the stormwater pipe on Lot 13. On balance I believe that the current values applied represent a fair and reasonable estimate of the relative values of the parcel.
Summary:
In summarising this matter I am reminded that in respect of a notice of appeal the onus is upon the appellant to prove his case. That is directed by s 45(4) which states:
“45(4) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner.”

I am further reminded that unless the appellant proves that the Chief Executive has followed a wrong principle or made a serious error of fact in his determination of the valuation, then the value as determined by the Chief Executive shall stand. Brisbane City Council v Valuer General (1977-78) 140 CLR 41 at 56.
Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value of Lot 14 on RP 81679 as determined by the Chief Executive in the sum of $48,500 is affirmed.

NG DIVETT

MEMBER OF THE LAND COURT