Oxenford v Chief Executive, Department of Lands

[1995] QLC 74

[1995] QLC 74

 

  LAND COURT

BRISBANE

25 August 1995

Re:     Appeal against a valuation -
  Esk Local Government.
  AV94-214.
Valuation of Land Act 1944.

Kenneth J and Daphne W Oxenford
  v.
  Chief Executive, Department of Lands

D E C I S I O N
           This is an appeal against the determination of the Chief Executive, Department of Lands, of the unimproved value of Lots 1 and 3 on RP 7758, parish Biarra, and Lot 1 on RP 181056, parish Cressbrook, in the sum of $180,000 for the purposes of the Annual Valuation of the Area as at 30 June 1993.
           The appellants are contending for a value of $145,000 on grounds that the aquifer supplying a well on the property has been affected by bores placed on neighbouring land by Local Government for town water supply purposes.  But for this submission the appellants would have no argument with the value of $185,000 which applied to the property before the objection was allowed.  The reduction in value in the sum of $40,000 is calculated from the costs of putting down a bore, pumping from the bore to the well from which water is taken for irrigation and other matters incidental thereto.  The figures are as follows:

Bore with casing  -  $ 2,000
           Pump  -  $ 1,600
           Electricity Connection  -  $ 1,100
           Piping to well  -  $   340
           Trenching  -  $   150

TOTAL  -  $ 5,190

Interest on the sum is calculated at 11% and it is estimated that electricity would cost $285 per annum.    

The subject property is in two parcels with the southern severance being situated to the south of and almost adjacent to the township of Toogoolawah.  The northern severance is situated about 1.5 kms to the east of Toogoolawah with access by Mount Beppo Road.  The area of concern is the southern severance which comprises an area of agricultural alluvial soils, some watercourse grazing land and a substantial area of easy undulating forest ridges.  The valuation applied to the property overall was written by Mr EG Ridley, registered valuer in the employ of the Department of Lands.  The valuation is made up as follows:
           32 hectares arable irrigable @ $2440  $ 78,080
            6 hectares watercourse grazing @ $1000  $  6,000
           138.5 hectares forest grazing @ $692  $ 95,842
           176.5 hectares @ $1,020 per hectare  $180,000
           The Brisbane Valley Highway forms the western boundary of the southern severance.  Camp Creek runs through the area joining with Cressbrook Creek on the north.  The well which it is said has suffered from interference with the aquifer is situated just to the west of Camp Creek and between Camp Creek and the Brisbane Valley Highway.  To the north-west and within the road reserve are two bores licensed to Local Government from which water is taken for township purposes.  These bores commenced operation in the end of 1988.  They have recently ceased pumping through lack of water.  There is a further bore to the south of the Council bores which is a State bore providing water to the Toogoolawah High School.  The appellants offered no objection to the licensing of the bores but became concerned when supply from the well on their property fell.  The final paragraph of the statement of evidence of Mr Oxenford reads:

"We claim that prior to Council pumping, our well was yielding some 8 to 8.5 thousand gallons of water per hour.  This flow would rise with heavy and prolonged rain and fall with prolonged drought but after time would settle at the 8 to 8.5 thousand gallons per hour.  Following Council pumping the yield fell by some 2 to 2.5 thousand gallons per hour.  This loss of yield would be sufficient to irrigate (pumping 10 hours per day) 10 acres.    "

The new licensed bore on the appellants' property was put down at the end of 1993 and became operational in early 1994.  With the assistance of this bore, the appellants say that they have recouped the effect of the reduction in supply (10 acres irrigable land) but see no added advantage in having the extra water source. 
           Under the Act, the date as at which this valuation is to be ascertained is 30 June 1993.  It is at that date that a sale of the property in an unimproved state (but with potential for development) is to be envisaged.  It is to be assumed that the hypothetical prudent purchaser will consider all elements affecting value including the cost of obtaining water for irrigation if such potential exists.  In the context of the subject valuation, the history of the water supply to the aquifer from the Cressbrook Dam could be gauged together with regional factors such as the vicissitudes of the seasons and the prudent purchaser of course could be expected to be aware of what is going on with adjoining or other lands in the locality.  Mr Oxenford said that in 1989 the rainfall was above average and that in 1988 it was average.  The Council bores ceased operating in late 1994 for lack of water and Mr Ridley said that on his way to Toogoolawah for the hearing of the case he noticed that the appellants' irrigation system was working.  Nevertheless and without attempting to resolve one way or the other whether the bores on the adjoining property have been the sole cause for the loss in supply it is accepted that a hypothetical prudent purchaser would resolve any doubts he has on the matter in his favour and seek a reduction in selling price or in this case in the valuation.
           The respondent, on objection, allowed a sum of $5,000 which Mr Ridley considered is sufficient.  In that reasoning, he seems to be of the opinion that the new bore may be on a different aquifer and so could render the property more secure than previously.  On the other hand, if I accept the evidence of Mr Oxenford what is lost is 10 acres (about 4 hectares) of irrigable land which would, without irrigation, on the valuation figures supplied by Mr Ridley be reduced in value from $2,440 per hectare to probably watercourse grazing land which is valued at $1,000 per hectare.  In that light the prudent purchaser would have to consider whether it would be worth incurring the amount claimed to lift the value of 4 hectares of land by $1440 per hectare.  That is essentially a question whether returns would justify the cost.  In this light and having formed the opinion that Mr Oxenford is not a person who would be a fool with his money, I tend to think that when things have settled down the extra bore may enable the property to be more intensively worked under irrigation or render the property more secure in drier times.  Were that the case, the potential inherent in the land to take an extra licensed underground water source would be a relevant consideration in ascertaining unimproved value.  This question, no doubt, will be answered in the years following this valuation.  As at the relevant date, the slight doubt I have in the matter will be resolved in favour of the appellants but not to the extent sought.  I propose to increase the allowance made by the Chief Executive to $10,000 which I freely admit is somewhat arbitrary.
           Accordingly, the appeal is allowed, the determination of the Chief Executive is set aside and the unimproved value of the subject land as at 30 June 1993 is determined at One hundred and seventy-five thousand dollars ($175,000).

(DM White)           
  President of the Land Court