Micallef v Department of Natural Resources and Mines
[2005] QLC 34
•29 June 2005
LAND COURT OF QUEENSLAND
CITATION: Micallef v Department of Natural Resources and Mines [2005] QLC 0034 PARTIES: Angela and Frank Micallef
(applicants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO.: AV2002/0199 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under Valuation of Land Act 1944 DELIVERED ON: 29 June 2005 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER Dr NG Divett ORDER: The appeal is upheld, the value established by the Chief Executive is set aside, and the unimproved value of Lot 9 on RP 123058 is determined in the sum of Thirty Thousand Dollars ($30,000). CATCHWORDS: Valuation – Factors in valuation – Impact of local flooding – Relativity – Valuation of Land Act 1944 APPEARANCES: Mr F Micallef on behalf of the appellants
Mr M Heather, Principal Legal Officer appeared for the respondent
Background:
This matter relates to land at 197 to 207 Ebenezer Road, Ebenezer, and described as Lot 9 on RP 123058, Parish of Jeebropilly. The subject land has an area of 4.047 ha, and is located about 5 km. south-east of Rosewood and about 24 km. south-west of Ipswich. The subject land is located in an area of rural home sites and has reasonable access to shopping facilities as well as primary and secondary schools and rail services at Rosewood. There are major commercial and retail services at Ipswich. Access is available to Ebenezer Road, which is bitumen sealed with earth shoulders and table drains. Telephone and electricity services are available. The subject land is designated as Rural under the Ipswich City Council Town Plan of 19 February 1999, effective at the date of valuation of 1 October 2001. The key issues are the nature of the land, impact of flooding, relativity and comparison of sales.
On 9 February 2002 the Chief Executive issued a valuation of the subject land at $36,000. Following an objection the Chief Executive confirmed that figure on 4 June 2002. The appellants have now appealed claiming the unimproved value should more properly be $25,000. Subsequently at the hearing on 7 February 2005 the appellants were granted leave to lead to a lower figure of $10,000 as explained later.
Frank Micallef appeared and gave evidence on behalf of the appellants. Mr M Heather, Principal Legal Officer appeared for the respondent, calling evidence from Daniel O'Connor the experienced departmental registered valuer now accepting responsibility for the valuation, which had previously been determined by another valuer no longer available to defend the valuation.
History of the appeal –
This matter has been adjourned for several years at the request of the appellants, in order to pursue other matters both before the Planning and Environment Court and the District Court. Mr Micallef advises that both of those matters related to the impact of flooding and subsequent construction of a bund levee wall surrounding the existing dwelling, which was constructed by the appellants to seek to protect the dwelling from repeated flood episodes. Mr Micallef now advises that the Planning and Environment Court matter, following a consent agreement to obtain a detailed engineering report on the flooding, is now in process of being resolved, but the District Court matter continues to be outstanding. However neither of those matters were now seen as any reason for further delay in the current matter, which then proceeded on 7 February 2005.
In explaining why he now sought leave to amend his estimate of the unimproved value from $25,000 to $10,000, Mr Micallef explains how he arrived at those figures. He advises that the estimated value of $25,000 was provided by a registered valuer, who had initially been engaged to defend the matter. However he argues that figure was determined without a full knowledge of the current flooding risks subsequently now found to exist. With the full knowledge now of that flooding risk, Mr Micallef has taken the advice of a local real estate agent, who believes the subject land only has agistment value at about $10,000. Mr Micallef offers an opinion that, in the absence of the now known flooding problems, he could concur with a higher value for the subject land.
Mr O'Connor advises that the subject land had been previously valued at 1 October 1999 at $29,000. He advises that about a 20% increase had been factorised into all of the unimproved values in that locality at the next subsequent valuation at 1 October 2001, the subject land being increased to $36,000. It is noted that the unimproved value of the subject land had remained constant at $29,000 since the valuation at 1 October 1996.
The nature of the land –
The subject land is an irregular shape parcel, comprising essentially low lying blue gum forest country, rising easy to a sloping more elevated area at the south-east corner. An orthophoto map showing those features, as well as depicted flood levels for varying flooding episodes, is provided in Exhibit 2 – figure 3. Mr Micallef advises that the soils on the subject land are essentially 40% to 60% bentanite clays, which inhibit water from soaking into the soils, and consequently increases runoff capacity for local surface waters. The natural contour information suggests that the subject land varies from about reduced level 38.5 m. Australian Height Datum (AHD) at Ebenezer Road, to RL 45.0 m. at the southern boundary.
The subject land is transgressed by several local gullies, whose catchments are shown on a map prepared by consultant engineer Max Winders and Associates (Exhibit 2 – figure 2). Mr O'Connor agrees that the land has a depression running through it, which in his opinion, has both problems and opportunities for the owners. Mr O'Connor also agrees that the existing dams constructed by the appellants is in the lowest part of the subject land just south of the existing dwelling site.
However Mr O'Connor argues that any soil borrowed from the dam site could have been used to assist in constructing an access road along the eastern boundary to the better building area to the rear of the subject land. Mr O'Connor also argues that because of its topography, there are several possible sites for water storage dams on the subject land, which are useful on a rural home site.
In respect of a possible access road to the better building area at the rear of the parcel, Mr O'Connor has made some preliminary estimates of likely costs for a suitable road to bring it to a level to allow access on most flooding situations. He notes that a similar approach has been adopted by the adjoining owner of Lot 8 to the east. On that parcel an access road has been built along their eastern boundary to similar higher lands to the rear of that parcel. Mr Micallef agrees that has occurred, but notes that Lot 8 is higher in elevation, and therefore less impacted by the more general flooding upon the subject land. It is noted that even that access road along Lot 8 was likely to be cut by a 1 in 100 year flood (Exhibit 3 – figure 3).
In his valuation of the subject land, Mr O'Connor has made allowance for the construction of an access track with associated cross-flow drainage pipes at a total cost of about $7,000. His estimates include providing about 10 x 2 pipe culverts of diameter 0.38 m, which he is advised would have cost about $100 each in 2001. He notes that similar second quality pipes would be acceptable, and could further reduce those costs, but argues that adequate piping could be obtained for about $1,000. Mr O'Connor has wide experience with this type of farming operation, and notes that such access roads are common on many rural lands, particularly black soil farms.
Mr Micallef questions whether it would be approved by the Council to construct such an access road, as he notes that a permit would be needed under Bylaw 4.11.1, where the access track crosses over an overland flood path. Both parties agree that any such proposal must include provision to not block natural flow waters. However Mr Micallef argues that such an application to the Council would need to be supported by a full hydrological report at a further cost to the appellants. Mr O'Connor agrees that could be required, but argues that any channelling of surface flows from the adjoining Lot 8 could also assist in filling the appellants' dam, which could minimise any detrimental cost.
In explaining how he has sought to overcome the existing flooding problems, Mr Micallef explains that he has had to build a bund wall levee around the existing dwelling, about 2.4 m. high (40.5 m. less 38.1 m. AHD), at a total cost of about $48,000. He advises that the levee bund is about 4 m. wide at the top, and slopes gently to avoid any scouring. He has considered filling the internal area of the bund wall to provide a raised building platform. However he estimates that with the cost of raising the dwelling, and the 15,000 cubic metres to 16,000 cubic metres of filling that is needed, that could cost about $180,000. Mr Winders advises that the average crest level of the bund wall is RL 40.5 m. AHD, while the floor level of the dwelling is RL 40.3 m. AHD, or about 0.9 m. above the level of Ebenezer Road. Mr Micallef also notes that the bund levee banks still only provide protection from a 1 in 65 flood frequency level.
In explaining the general lower elevation of the front part of the subject land, Mr Micallef advises that because of certain filling on Lot 10 to the west of the subject land, the natural drainage had been impeded. Once he had undertaken certain remedial works near the frontage of the subject land, the natural drainage flows now work more effectively. However he advises that the subject land is always the last lot to be cleared of flood waters in that area. Mr Micallef argues that in its natural state, before the filling on Lot 10, that parcel would have been the lowest point in that small catchment.
Mr Micallef also advises that before his earthworks, the land had fallen back from Ebenezer Road to the subject land. That had the effect of causing a ponding situation at the front of the subject land. He argues that change in the natural fall of the topography had resulted from the roadworks constructing Ebenezer Road. He notes that Ebenezer Road pavement is 0.7 m. above the lowest point on the subject land, so that before water can go over the roadway, it must be greater than 0.7 m. deep on the front part of the subject land. Mr Micallef also agrees that Mr Winders' cross section in his technical report show that the low point of the subject land is towards the centre of the parcel, confirming his claim that the land is really "the sink" of that catchment area.
In respect of the location of the existing bund levee bank, Mr Micallef agrees that the toe of the existing side of the levee finishes on about the eastern boundary. Mr Micallef also agrees that he currently has an access culvert over the levee wall at about that point. However he argues that if an access track was built along the eastern boundary, it would need to accommodate two waterways from the south, and a further two waterways from Lot 8 to the east (Exhibit 2 – figure 2). Mr O'Connor argues that normal side drainage channels to collect those waterways, and then pass the water under the access track, would be a common practice in such circumstances.
In terms of the known flooding in that locality, Mr Micallef advises that the Council has repeatedly upgraded the surface water drainage across Ebenezer Road since 1976/77. He advises that the Council originally placed four box culverts, replacing the original concrete spillway. Then later the Council upgraded those four box culverts to nine box culverts in 1996. Mr Winders' report shows that those nine culverts are each 1.2 m. by 0.45 RCBC 6 (Exhibit 2 – figure 3). Mr Micallef argues that such a wide box culvert structure indicates the Council's concern with the extent of local flooding in that area.
Mr O'Connor argues that in providing an allowance deduction of $14,000 from the basic valuation assessment of the subject land, he has adequately allowed for the lack of the elevation of the subject land, and also an allowance for providing a better access to the best building site at the rear of the land. He notes that about one third of the site is above the 1 in 100 year flood prediction. He advises that market evidence supports elsewhere that, because of the elapsed time since the 1974 major floods, purchasers make little allowance for such major flooding potential.
Mr Micallef sought belated leave to introduce fresh evidence in respect of any possible impact upon the subject land, of a noise buffer zone recently introduced into that locality because of major activities in the area. However it was conceded that while the buffer was declared on 19 February 1999, its impact did not officially come into force until well after the relevant date, and there was no conclusive evidence to indicate whether the presence of the buffer area had any impact, if at all. On that basis the further evidence was not appropriate in this matter, but it may become appropriate for consideration at a later time. It was noted that the buffer area extended westward to Mount Forbes Road, and includes the subject land, but not any of Mr O'Connor's sales. I note also that the difficulty of finding sales evidence in similar buffer areas in that locality, was discussed in McAlpine v Department of Natural Resources, Mines and Energy (AV2002/0136), 23 April 2004, unreported, at paragraph [12] onwards. I also note from the Ortho photo mapping, that while the development of buildings has occurred on most parcels towards the west of Mount Forbes Road, there is much less development near the subject land to the east.
The major concern of Mr Micallef is that the respondent department may not have been fully aware of the extent of local flooding affecting the subject land. He notes that recent studies for New Hope Coal Australia by PPK Environment and Infrastructure Pty Ltd (PPK), were undertaken in 1994 (Jeebropilly North), and 1997 (Jeebropilly West). He notes that both of those studies only examined lands to the north of Ebenezer Road (Exhibit 3 – figure 5). He notes also that advice to him from New Hope Coal Australia of 4 August 2000 indicated that there would be "no impact of flooding from the Bremer River on your property". However New Hope Coal also advised that they stopped their study at Ebenezer Road, as that was all the area that they needed for their work. Mr Heather argues that the statement by New Hope Coal of "no impact" is a positive statement, rather than an evasive one. Mr Micallef also notes that the 1997 study also concludes at s.2.2:
"It became clear in discussions with land holders that higher flood levels had been experienced more frequently than the modelling indicated."
Mr Micallef also notes that while PPK had considered the flood frequency calibrations by the Department of Natural Resources (DNR) of the PPK 1994 study, the DNR advised that it had no input into the findings of the PPK report (27 July 2000). It is noted that the DNR established a run-off routing model for the Bremer River catchment to Walloon in 1990, and he advised that model has estimated the 1974 Bremer River floods as a 1 in 65 year event. The conclusions therefore initially understood by Mr Micallef, was that flooding from the Bremer River was not a problem for the subject land.
However closer examination of part of that PPK study in 1997 (Exhibit 6 – figure 1) reveals that the flood study stopped abruptly at the northern boundary of Ebenezer Road. By correlating that 1997 advice, with an earlier "flood study of major streams" by Munro Johnson and Associates Pty Ltd, Consulting Engineers in 1987, Mr Micallef was able to confirm that the flood predictions had in fact extended to the south of Ebenezer Road (Exhibit 5 – Inundated Areas for an Annual Exceedence Probability of 1 in 100 map). Mr Micallef also notes that at s.4.5 of that report the consultants note:
"It must be stressed that the flood levels calculated in this study are suitable for strategic planning purposes only. That is, the areas of the shires subjected to severe flooding may be identified and quantified. The results of the study would not be sufficiently accurate for use in other areas of shire planning, such as specifying building platform levels etc. It would be necessary to undertake a more rigorous backwater analysis of the streams to provide this level of accuracy on the estimated flood levels".
Those three studies were identified by Mr Winders in s.2.2 of his report (Exhibit 2 – page 2).
Mr O'Connor agrees that Bremer River flooding can be a problem, and he supplies a composite map showing the extent of different predictions for river floods of frequencies 1 in 28 to 1 in 200 (Exhibit 4 – map). It is agreed that those predicted inundations coincide approximately with the orthophoto mapping of the subject area in Mr Winders' report (Exhibit 2 – figure 3).
Mr Micallef advises that following the 1997 Munro Johnson study for the Moreton Shire, now Ipswich City Council, it was recommended that having determined the broad extent of flood prone land, it was necessary to undertake more rigorous studies in selected areas to establish accurate levels for the location of house pads on flood prone lands. Hence the impact of river flooding was known to the Council since 1987. Thus, when the existing dwelling was built by the former owner in 1989, the Council required the floor level to be 0.3 m. above the 1 in 100 year prediction.
However Mr Micallef argues that those predicted levels had subsequently been found to be in error, and the dwelling is now at a level that it would be impacted by a 1 in 100 year flood. On that basis Mr Micallef argues that the Council has a duty of care, which they have not fulfilled by using incorrect information to the previous owner. Hence the District Court now proceeding, but that is a not a matter for my consideration.
Mr Micallef argues that the impact of major river flooding is not the real threat to the subject land. He notes that because of the nature of the topography in that area, there is a total catchment area of about 535 ha., which eventually discharges through the subject land. He argues that it is that "local flooding" that creates the major problem. Mr Micallef advises that because of those six small catchments which join into two major streams through the subject land, rainfalls of only 39 mm. in two hours or 61 mm. in five hours, have caused local runoffs to a depth of 0.7 m. below the existing dwelling before the bund levee was constructed. He notes that the maximum flooding to a depth of 1.5 m. to 1.8 m. occured when 325 mm. of rain fell over a period of three days.
Mr Micallef notes further that without the bund levee in place, a recent storm in October 2004 would have resulted in about 1 metre of flooding of the dwelling. Mr Micallef also notes that Mr Winders' report also noted at ss.2.3.2:
"The impact on peak flood levels for smaller events was found to be slightly less than for the Q100 design event".
Mr Micallef notes that as those "smaller" frequency events occur more often than the 1 in 100 event, then the local flooding is the key issue.
Because the extent of river flooding is not contested by the respondent, Mr Heather argues that the extent of flooding is not an issue for consideration by the Court. To support that conclusion he refers me to the findings of the President of this Court in AE Lucke & Ors v Chief Executive, Department of Natural Resources and Mines (AV2000/163 and others), 28 February 2002, unreported at p.7, which I will discuss later.
Mr Micallef disagrees that the extent of flooding is not an issue, in that he argues that until about a year ago, everyone agreed that the flooding did not extend south of Ebenezer Road. He argues that in his discussions with the respondent and others, it had repeatedly been denied that flooding crossed Ebenezer Road. Mr Micallef then argues that if that had been the understanding of the subject land when the original valuation of $36,000 had been assessed in 2001, then why was that valuation still maintained now that the flooding problem was known to be more extensive? He notes also that local flooding in the catchment can cause flood levels to rise very quickly, which can be a matter of concern to owners.
In respect of the Bremer River flood study (Exhibit 6), Mr Micallef advises that the large "ponding area" immediately to the north of Ebenezer Road near the subject land, is an area modelled as an additional water storage area which fills from overflows in the Bremer River. It is noted that when that storage area, which is constrained by natural higher lands to the north but south of the River, and Ebenezer Road to the south, would have an impact upon the discharge capacity of flood waters through the box culverts under Ebenezer Road. That would have an impact upon the period of flooding upon the subject land. Mr Micallef notes that if Ebenezer Road construction did not exist, then that storage area would extend into the subject lands itself.
Comparison of sales –
Mr Micallef provides no evidence of sales to support his estimate of the unimproved value. Mr O'Connor provides the following sales of vacant lands:
· Sale 1 – (97 to 103 Ebenezer Road, Ebenezer – Lot 17 on RP 125621). This is a 2.548 hectare parcel located about 0.9 km west of the subject land. The sale is an elevated parcel with an easy fall to the rear, and with a superior outlook. The sale is smaller, but is seen overall as superior to the subject land due to its elevation and outlook. The sale sold in August 2001 for $60,000, was analysed at $53,000 and applied at $44,000 (83%).
· Sale 2 – (57 to 63 Ebenezer Road – Lot 22 on RP 125621). This is a 3.248 ha parcel located about 1.3 km west of the subject land. The sale is an elevated easy sloping parcel to the west and south, with easy access from Ebenezer Road and has been developed with a new house. Though smaller, the sale is seen as superior to the subject land due to its elevation and outlook. The sale sold in September 1999 for $50,000, was analysed at $47,000, and applied at $46,000 (98%) as it was an older sale in a rising market, reflecting a 20% increase in that area.
· Sale 3 – (Waters Road, Calvert – Lot 252 on CH 312056). This is a 7.39 ha parcel located about 8.4 km west of the subject land. The sale is a generally level easy sloping parcel with access from gravelled Waters Road, and also frontage to Western Creek. It has been developed with a new dwelling. The sale is in an inferior location at Calvert, but is larger in area. Overall the sale is seen as superior due to its elevation and outlook. The sale sold in April 2001 for $59,000, was analysed at $57,000 and applied at $45,000 (88%), reflecting a nil increase in that location.
· Sale 4 – (Mount Walker West Road – Lot 1 on RP 159822). This is a 1.588 ha parcel located about 6.7 km south-west of the subject land, fronting Mount Walker West Road, and backing on to the Bremer Road. The sale is totally below the 1 in 100 flood line, and would require major filling for an effective building site. The sale is seen as a unimproved level value for that area. The sale sold from Thompson to Belford in March 1998 for $18,000. The sale was applied adopting a 20% increase for that location at about $21,000 at 1 October 2001. The sale is seen as within the 1 in 20 year flood level, so it is also affected by local flooding. That sale is also low wet black soil country similar to the subject land. The subject land is seen as superior as it does have an area of land in the south-eastern corner, while the sale is all flat flood prone land. Mount Walker Road comes off Warrill View Road (Exhibit 8).
Mr Micallef accepts that Sales 1 and 2 are reasonably close by to the subject land, but he argues that the higher elevation of those sales makes them much superior to the subject land. Mr O'Connor notes further that Sale 1 is about 20% better land than the subject land, which is reflected in his valuation at $36,000. He notes also that the higher application of Sale 2 reflects its more aged date of sale, and that Sale 2 is superior to both Sales 1 and the subject land. He notes that Sale 2 is lighter easy forest country, and as it is more elevated, those are features sought in the market place. He notes that while Sale 3 would suffer some local flooding problems, that would not be as severe on the subject land, although Sale 3 is part of a blue gum flat area.
In supplying his Sale 4 Mr O'Connor agrees that the applied unimproved parcel at the relevant date is greater than the actual sale price achieved in the market place. While he is aware that could be misconstrued as his forming an opinion, and not accepting the sales evidence, he seeks support for the adoption of Sale 4 as a minimum sale in the decision of the President of this Court in Fairfax v Department of Natural Resources and Mines (AV2003/0225) 23 February 2005, unreported.
Relativity –
In explaining the relativity between parcels in that locality, Mr O'Connor supplies a SmartMap (Exhibit 7), which also includes an orthophoto map of the area showing the broad contour information. Those contours confirm the higher elevations of Sales 1 and 2, which are about 25 metres higher in elevation than the subject land. It is also noted that while residences are built closer to Ebenezer Road near Sales 1 and 2, in the lower elevation areas near the subject land the residences are more generally removed from Ebenezer Road. There is also a greater density of residential dwellings in the area of the sales, probably reflecting the greater attractiveness of the higher elevation and aspect near Sales 1 and 2. Clearly the locality of the subject land is seen in the market place as inferior to the locality of Sales 1 and 2.
If I look then at the SmartMap in Exhibit 7, I find that parcels in the locality of the Sales 1 and 2 vary in area from about 2.6 ha to 3.6 ha, and have unimproved values between $46,000 to $44,000, while those more removed from Ebenezer Road in Cobb Lane are valued down to $40,000. The slightly larger areas in parcels in Ebenezer Road east of Mount Forbes Road vary in size from about 4.1 ha to 4.05 ha, and have unimproved values generally from $47,000 (Lot 14) to $45,000 (Lot 11) and rising to the east at $45,000 (Lot 7) and $46,000 (Lot 6) eastward. Only three parcels in that lower elevation area on Ebenezer Road have lower values at $40,000 (Lot 10), $36,000 (Lot 9 – subject land), and $41,000 (Lot 8). On that understanding there would appear to be consistency in those relativities, generally reflecting higher values in the more elevated areas.
I note also Mr O'Connor's advice that over a long period since the 1974 major floods in the Brisbane and Bremer Rivers, market evidences tends to support the view that a 1 in 100 flood event does not rate in the public's perception of land values. Certainly that has been the experience in many Brisbane appeals in which Mr O'Connor has given evidence.
Mr Micallef does not disagree with Mr O'Connor's general thrust of unimproved values in that area, but argues that insufficient allowance has been made for the local flooding problems on the subject land. Mr Micallef also argues that the main reason that his adjoining owner to the east on Lot 8 built on the rear of that parcel, and constructed an access track along its eastern boundary, was because he was aware that the 1 in 100 flood line roughly ended near his land. As a consequence of the higher elevation on Lot 8, Mr Micallef argues that any such flooding would be less severe than on the subject land. Mr Micallef also notes that Lot 10 adjoining to the west of the subject land continues to be vacant lands, mainly because of the flooding problems.
In explaining how he had concluded an unimproved value of $36,000 for the subject land, Mr O'Connor advises as follows. He adopted a base figure of $45,000 in that area from which he had deducted an allowance of 15% ($7,000) for the lower elevation of the subject land. However as it was larger than the average lot, he had increased that figure by 10% ($5,000). To that reduced figure he then made an allowance of $7,000 for earthworks associated with building an access track to the higher land at the rear, concluding a figure of $36,000.
Decision:
Before examining the evidence, I turn to the legislation and note that under the Valuation of Land Act 1944 (the Act), the unimproved value of the subject land is defined by s.3(1), 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 the purposes of this Act, the improvements did not exist."
On that basis the subject land is to be valued as a vacant parcel with all its disabilities and potential, but for the highest and best use for which it could be applied. Mr O'Connor has valued the land as a rural residential site, where a dwelling could be constructed to the rear on higher ground. Access would also be required to ensure effective use of that higher ground. I would agree with that conclusion.
The nature of the land –
It is agreed that the subject land is perhaps the lowest of the parcels in that area fronting Ebenezer Road, and I accept that a local catchment of about 535 ha generally drains through the subject land as shown by Mr Winders (Exhibit 2 – figure 2). That is also in part supported by the orthophoto map contours in Exhibit 7. I also accept that the natural fall of the subject land is such that ponding of surface waters will accumulate at the lowest position, coincident with the existing dam site to the south of the existing dwelling. The apparent inadequacies of the existing culvert drainage under Ebenezer Road would also seem to contribute to the existing drainage problems. There is generally no difference between the parties on those matters.
There is disagreement in respect of the practicality of erecting a dwelling towards the rear of the parcel, mainly because of likely flooding of any access track to that higher location. Mr Micallef questions whether the Council would approve such an access track, as he notes that a permit would need to be approved by the Council, which would be concerned that overland flows were not impeded. However the presence of a similar access track on the adjoining Lot 8 would suggest that such an option would seem reasonable. I also note that Mr O'Connor's suggested strategy would be to effectively channel any overland flows across Lot 8 into a series of piped culvert under any access track, and then into the dam site on the subject land. That solution, in my opinion, is very sensible.
In respect of the need to not impede natural free flowing surface waters, I am reminded of the decision in the High Court in Gartner v Kidman [1961] 108 CLR 12, at 48 and 49. While that decision involves a matter of trespass, which would not occur in the current matter, the High Court considered the responsibilities of both an "upstream" and a "downstream" owner, where surface waters flow. Windeyer J noted when speaking about a "lower proprietor" who is being impacted by the unnatural concentrated flow of water upon his lands, when he said at 49:
"Although he has no action against the higher proprietor because of the natural unconcentrated flow of water from his land, he is not bound to receive it. He may put up barriers and pen it back, notwithstanding that doing so damages the upper proprietor's land, at all events if he uses reasonable care and skill and does no more than is reasonably necessary to protect his enjoyment of his own land. But he most not act for the purpose of injuring his neighbour. It is not possible to define what is reasonable or unreasonable in the abstract. Each case depends upon his own circumstances."
In the proposal by Mr O'Connor, any channelling and diversion of surface water flows upon Lot 8, would not be impeded, but merely channelled underneath a new access track on the subject land. The matter of surface water flows, and the right of a downstream owner to seek damages as a result of unlawful interferences with the use of enjoyment of his land as a result of a levee bank, was considered in Warne v Nolan [2001] QSC 053, 2 March 2001, unreported. In that matter Muir J considered guidance from Gartner v Kidman at p.22, where he summarised the principles of both the "higher proprietor" and the "lower proprietor". That matter dealt with a matter of legal liability for damages and emphasised that an owner may not direct water to the detriment of a third proprietor (paragraph 86).
In respect of the likely cost of providing such an access track, I only have Mr O'Connor's opinion of $7,000 for that purpose. While Mr Micallef questions whether such a low cost seems reasonable, he reminds the court that he has already spent $48,000 in constructing the bund levee bank around the dwelling. But I have no specific details of the quantum of earthworks in that levee bank, except its approximate height (2.4 m.), and the width at the top of the levee (4 m.). While Mr Micallef estimates that the internal volume of filling that would be required to build a fully elevated building pad would be in excess of 15,000 cubic metres, it is not the role of this Court to then conclude the total volume of material involved for the levee bank (JL and I Qualischefski & Ors v Valuer-General (1979) 6 QLCR 167, at 172). That could vary considerably with the sloping nature of the batters. On the evidence, accepting Mr O'Connor's wide experience of such rural matters, I accept $7,000 as a reasonable allowance for the need for an elevated access track and drainage costs.
Impact of flooding –
The key difference between the parties would appear to be the level of allowance provided for the constantly recurring "local flooding". Mr Micallef contends that the previous unimproved value of $36,000, which Mr O'Connor now supports, would have been made without a comprehensive understanding of the extent of the local flooding problems. Mr Heather advises that flooding is not contested in this matter, and therefore is not an issue for consideration as noted in Lucke (supra) (see paragraph 28).
If I turn then to Lucke I note that involved three appeals against annual valuations in the Calliope areas. The parties had argued that local mining activities had resulted in a decline in groundwater flows which was impacting the value of the lands. Various hydrology studies were provided, and there was a difference of opinion by Dr James (for the appellants) and Mr Lloyd (for the respondent) as to the likely cause of the lowering of the water table. Dr James argued that the lower water levels were as a result of "de-watering" operations at the mine, while Mr Lloyd argued that they mostly resulted from the extent of drought. In analysing that evidence the President noted at 7:
"For the purpose of these cases, it is not necessary to attempt to resolve these differences between the experts, even if I had sufficient evidence to do so. It is sufficient to say that it is common ground that there has been water depletion on the three subject properties, whatever the cause. Whether that water depletion has had an effect on the market value of these properties and whether the whole area is blighted by other "negativities" as described by the appellants, are matters dealt with by the expert valuers."
Clearly what the President was saying was that, whatever the reason for the agreed decline in water levels, the response of a prudent buyer and seller under the Spencer test, was what really counted in that matter (Spencer v The Commonwealth of Australia (1907) 5 CLR 418, at 431 and 432). It was not what caused the decline in water levels, but what the market place considers such fall to be worth.
Now in the current matter, while it is agreed that flooding impacts do occur on the subject land, the level of impact is disputed. As the full extent of the local flooding, and perhaps the river flooding to the south of Ebenezer Road, was possibly not known when the original valuer had determined the unimproved value of $36,000, it is possible that the flooding impacts may have been underestimated. The general emphasis of river flooding from the Bremer River by the respondent would tend to support that conclusion. I believe that Lucke can be distinguished on that basis, and I will consider further the flooding intensity frequency matters.
I note that Mr Heather has also drawn support that the matter of hydrological evidence was not really the key issue in a valuation appeal, in the decision of the Land Appeal Court in BG and AK Wilson v Chief Executive, Department of Lands (1994-95) 15 QLCR 63. In that matter the appellants had argued that overhead aircraft noise was the major debilitating factor. The Land Appeal Court concluded at 68:
"Far too much time and expense, in our opinion, was wasted by the appellants, and as a result the respondent, on the issue of aircraft and resultant noise effects. We would be foolish to attempt to confine the effects within specific rather than general boundaries. The detailed evidence put before this Court by the respondent Mr Skinner, identifies the centre line of the relevant flight as being a few hundred metres to the west of the subject lot. It is submitted, and there is no dispute, that noise effects are greater directly under the aircraft and that a distinction may be drawn between lands of different elevation. In applying the test required under the Act, and as expanded upon in Stubberfield v The Valuer-General (supra), we are of the opinion that in the market place the subject lot in common with many others, would be identified by the potential prudent purchaser, to use a common expression, as being under a flight path. We find no reason to depart from the findings of the learned Member below that the effects have been taken into account sufficiently by Mr Skinner in making the valuation."
Again I can distinguish Wilson in this matter, as the specific "local flooding" is peculiar to the subject land and the two adjoining Lots 8 and 10. It is not of a "general" nature such as the aircraft noise in Wilson, but a specific threat to those three parcels. It is clear that there is no specific sales evidence within that local catchment area to indicate the market's response to that local flooding". However on the evidence I believe that it is something more than the allowance for that effect by Mr O'Connor.
Comparison of sales –
If I turn then to the sales evidence, I find the following uncontested comparisons with Mr O'Connor:
Sales Area Analysed Value Comparison 1.
97 to 103 Ebenezer Road2.548 ha. $53,000 Superior 2.
57 to 63 Ebenezer Road3.248 ha. $47,000 Superior 3.
Waters Road7.39 ha. $57,000 Superior 4.
Mount Walker West Road1.588 ha $21,000 (applied) Inferior Subject land
4.047 ha $36,000 (applied) -
On the evidence that Sale 4 is totally inundated by a 1 in 100 year flood event, I agree with Mr O'Connor that would reflect perhaps a minimum sale price in that area.
I turn then to why Mr O'Connor has sought to adopt his Sale 4, at an applied value of $21,000 which was more than the actual sale price of $18,000. I note that in adopting his sales evidence, he has sought to allow for some increase in the market during the date of sale in March 1998, and the relevant valuation date of 1 October 2001. That is not the same as a valuer deciding to adopt a sale, but seeking to bring it into line with a price, which in his opinion, the property should have realised (Collins & Ors v The Minister (1923) 6 LGR 84 as cited in the text Rost & Collins, 3rd edn, at 87. On that basis I accept Sale 4 at an applied value of $21,000, as a minimum level of value in that area at the relevant date. Clearly the subject land should be valued at somewhere between $47,000 and $21,000.
Relativity –
It is agreed by Mr Micallef that if the "local flooding" had not been such a recurring problem, then he could agree with Mr O'Connor's figure of $36,000 for the subject land. If I adopt Mr O'Connor's allowance for a larger size lot of 10% as applied to the subject land (paragraph [41]), then I could conclude a minimum site value of similar nature as Sale 4, but of an area similar to the subject land at $21,000 plus 10%, or $23,000. It is noted that rural residential parcels are valued on a site basis, and not on a per hectare basis (DF and M Ward v Valuer-General (1983) 9 QLCR 48, at 50). On that basis the minimum value I could consider would be $23,000.
However, because of its more elevated nature at its rear (or southern) boundary, and its closer proximity to public services at Rosewood and Ipswich, the subject land must be more valuable than $23,000.
If I consider then the SmartMap (Exhibit 7), I find that a lot to the west of the subject land (Lot 11) and also to the east (Lot 7) are both valued at $45,000. Both of those parcels are larger than Sales 1 or 2, and hence attracts a size allowance of 10% ($5,000), although both are also lower in elevation to Sales 1 and 2 (about 20 metres). On that basis a level of about $45,000 would seem appropriate for both those two lots. The matter then to be allowed for is the disability of the subject land, and also the adjoining Lots 8 and 10, to have to construct an access track to the higher land at the rear of either of those parcels. That is not contested at about $7,000. That suggests that a realistic value of about $38,000 would be reasonable for any of these three properties. Because the subject land is the lowest of the parcels, a value of about $36,000 would seem reasonable based upon Mr O'Connor's knowledge of the flooding problems. I see no error in that conclusion.
However the evidence suggests that the respondent department had not been fully informed about the "local flooding" problems, and I will make a further allowance to $30,000 for that disability. While Mr Micallef might argue that his current approach of constructing a bund levee around the dwelling has costed much more than the $7,000 needed for an access track, that was really the outcome of a personal decision by the appellants. On the basis of the highest and best use of the land, I agree with Mr O'Connor that a residence could be more appropriately developed to the rear of the parcel, with an access track along the eastern boundary.
Conclusion:
Having considered the whole of the evidence, I am persuaded that the appellants have partly proved their case. The appeal is upheld, the value established by the Chief Executive is set aside, and the unimproved value of Lot 9 on RP 123058 is determined in the sum of Thirty Thousand Dollars ($30,000).
NG DIVETT
MEMBER OF THE LAND COURT
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