Stay v Chief Executive, Department of Natural Resources

[2000] QLC 67

[2000] QLC 67

 

LAND COURT,

BRISBANE

3 November 2000

Re:     Appeal against Annual Valuation -
Valuation of Land Act 1944 -
  Valuation Roll No:  3638/24800 -
  Local Government:  BCC-Enoggera.
  (AV99-391).

RL and DW Stay
v.
Chief Executive, Department of Natural Resources

D E C I S I O N

Background:
           This matter relates to a property at 30 Persimmon Street, Ferny Grove, and described as Lot 43 on RP167933, Parish of Enoggera.  The subject land is a 3.968ha irregular shaped parcel located about 12 radial kilometres north-west of the Brisbane GPO, about 900 metres south-west of the Ferny Grove Railway Station, and 2.5km south-east of the Brisbane Forest Park.  The land is in the immediate vicinity of High and Primary Schools, and near local shops on McGinn Road to the north.  The surrounding area has undergone rapid residential development in recent years.
           The subject land is zoned "Future Urban" under the Town Planning Scheme of the Brisbane City Council (the Council) of 13 June 1987, effective at the date of valuation of 1 October 1998.  All services are available, and the subject land is improved with two individual residential dwellings, following relaxation under s.7.6.16(b)(ii) of the Town Plan.  Persimmon Street is bitumen sealed, with concrete kerbing and channelling.  The key issues are the impact of flooding and a Vegetation Preservation Order (VPO), relativity, comparison of sales, and the method of valuation.
           On 8 March 1999, the Chief Executive issued a valuation of the subject land at $150,000.  Following an objection the Chief Executive confirmed that figure on 16 June 1999.  The appellants have now appealed claiming the unimproved value should more properly be $80,000. 
           Douglas Wesley Stay appeared and gave evidence for the appellants.  Mr K Fisher, counsel of Crown Law, appeared for the respondent, calling evidence from Edward Antoni, the Departmental registered valuer responsible for determining the valuation.
           This matter was heard in conjunction with another matter of the appellants (AV99-391), and evidence of the common sales, and the method of valuation are provided in that decision.

The Evidence:

(1)       The History of the Land -
Mr Stay explains that the subject land was the remnant of a former development of residential lots in the late-1980s, which was acquired by the appellants following a land transaction deal with the then developer.  The appellants purchased the subject land in 1989 for $22,500, at a time when the normal surrounding residential lots had sold for between $30,000 and $39,000.  The known problem with the subject land at that time was the anticipated large cost of constructing a bridge across a watercourse named Cedar Creek which traverses the centre of the subject land, prior to any further subdivision of the subject land.
           The appellants subsequently built a dwelling upon the area of the land south of Cedar Creek.  Subsequent to the construction of that initial dwelling, a VPO was placed over the subject land.  That VPO is crescent shape, covering much of the northern, eastern and western parts of the subject land, with an open grassed area along a ridge line towards the centre of the parcel.
           The appellants constructed a high level bridge across Cedar Creek in order to gain access to the new dwelling during spasmodic periods when local flood waters isolate the land.  However that bridge was washed away during cyclonic weather, and it has been replaced with a low-level single 1.5 metre diameter pipe culvert.  Because of continuing increasing incidents of flooding, the appellants were granted approval for a second dwelling on the subject land north of Cedar Creek, and now occupied by their parents.  That dwelling is frequently used as a refuge by the appellants while flooding isolates the main building.

(2)       The Nature of the Land -
           The subject land is totally surrounded by about 19 parcels, including a High School to the east (Lot 1307 on SL 8443).  The only legal access to Persimmon Street is either via a 3.5 metre wide access strip along which is located the current access roadway, and a sewer rising main; or via a 10-metre wide strip along which is located a Council 0.6 metre diameter water main.
           Physical access along the 10-metre wide strip is very difficult due to the 1:1 gradient of the topography, and the presence of an access easement in favour of the Council which allows servicing of the water main (Easement A).  There is a small sewerage pump site (Lot 42) on the subject land near the 3.5 metre access strip which is also impacted by a sewerage drainage easement in favour of the Council (Easement B).
           Access within the subject land is currently via a 320 metre concrete driveway, which Mr Stay estimates would cost $24,000.  Mr Stay also notes that other costs within the parcel were underground power ($5,000), telephone ($5,000) and a large culvert.  Mr Stay also notes that access via Easement B is also subject to the restrictions placed by commercial vehicles serving the sewer pumping station.  However Mr Stay concedes that it is normal for owners to pay for any internal costs of driveways, power and telephone lines, and those are matters which would be considered when purchasing the land.
           The impact of the VPO is of concern to the appellants, as Mr Stay advises that the close proximity of large trees (30 to 40 metres high), within 6 to 8 metres of the rear of the dwelling, and which overhang the dwelling, is a potential fire hazard.  He argues that because of the slope of the ground to the west of the house (almost vertical), about 4 years ago there was a wall of flame that funnelled up the slope to just short of the dwelling.  Mr Stay sees the limitations placed upon clearing within the VPO as a disability for the subject land.  Mr Stay concedes that trees within 15 metres of a dwelling can be removed, but argues that the physical difficulties of removing the trees are quite significant.
           Mr Antoni concedes that fires in that part of the subject land were a risk, but argues that the present north-eastern aspect of the dwelling is screened by a green environmental envelope of trees which provide a high level of privacy within the site.  However Mr Stay notes that the proximity to the school often leads to intrusion by students, who see the private reclusive nature of the subject land as a place to enjoy from school pressures.
           The key concern of Mr Stay is the changing nature of flooding within Cedar Creek.  Since the last decision on the subject land by this Court on 6 November 1996 (AV95-509), Mr Stay estimates that a further 1,000 to 2,000 new homesites have been developed at Glenfern estate, plus a further 1,000 homesites at Kiralee Gardens estate, both of which are upstream of the subject land.  The impact of those additional homesites has been to accentuate the runoff into Cedar Creek, and in particular to increase the speed with which the flood waters rise at the subject land.
           In 1996 Mr Stay argues that the frequency of isolation of the initial dwelling upon the subject land by the flood waters had been about two to three times a year.  Since the increase in urban runoff, Mr Stay argues that has now grown to six to eight times in the last year.  That increased frequency of flooding was also accompanied by a rapid rise within 10 minutes of a storm, with flood waters over the concrete driveway on the subject land being up to 3 metres in depth.
           The second dwelling upon the subject land was developed on a small pocket of land (about 800 square metres), on the verge of the floodway area, but outside the VPO area on the north of the creek.  The land was built up by large volumes of fill, and the dwelling erected upon piers.  Mr Stay agrees that the subject land is a beautiful place to live, but it has difficult access problems.
           A key difference between the parties is the likely cost of an effective all-weather link across Cedar Creek.  Mr Antoni has sought competitive estimates of cost to provide a 4-metre wide twin 2.1 metres diameter pipe culvert.  Based upon those commercial quotations, Mr Antoni has estimated a cost of $20,000 for a large and higher culvert than the current culvert for access.  Mr Antoni obtained those prices in order to check the previous allocation by the learned Member of $25,000 for that purpose.  Mr Antoni makes no allowances for depreciation of the existing culvert.
           By comparison Mr Stay argues that a culvert would not overcome the problems of regular flooding, and he anticipates that a high level concrete bridge was likely to be needed.  Mr Stay seeks guidance of bridge costs upon public roads in the area, estimating a cost of up to $100,000 for a high level bridge and associated headworks.  Mr Stay advises that Council had advised him that either a low level culvert structure, or a high level bridge structure would be required across the floodway.  It was agreed that Mr Antoni's estimate of $20,000 could represent the former solution, and Mr Stay's estimate of up to $100,000 could represent the latter solution.  Mr Stay had already investigated and rejected alternative and cheaper methods of utilising some existing inaccessible concrete A-frames presently existing upon the site. 

(3)       Comparison of Sales -
The sales evidence relied upon by both parties was the same as adopted in (AV99-391), and I will not repeat those analyses.  However the comparisons with the subject land in the current matter may be summarised as follows.
           In respect of his comparison with his sale in Upper Kedron Road, Mr Stay argues that the subject land has a more irregular shape, and has a larger number of adjoining parcels which would impact the level of privacy available.  Mr Antoni sees his Sale 3 at Payne Road, The Gap, as his most relevant sale, due to its size (4.05ha), and the impact of the shared easement access of that sale.  Mr Antoni sees the subject land in the current matter as far superior to his Sale 3 in terms of access and seclusion.

(4)       Relativity -
While Mr Stay provides no direct evidence of relativities with surrounding parcels in the current matter, in his final address he notes that rural homesites in Hogarth Road, and adjoining the western boundary of the subject land, all have comparable areas, but lesser unimproved values.  Those relativities with 72 McGinn Road were examined in AV99-392.  Mr Stay argues the Hogarth Road properties have better frontage and access, and similar topography to the subject land. 

(5)       The Method of Valuation -
Fundamental to the difference between the parties is the method of assessing the subject land under s.17 of the Act.  Mr Stay argues that the land should be valued on the basis of a single house site on the north side of Cedar Creek.  On that basis he draws comparisons with the adjoining residential parcels at 36 Persimmon Street (Lot 36 - 1024 square metres - $85,000), and 32 Persimmon Street (Lot 29 - 1055 square metres - $87,000), concluding an unimproved value of the subject land at $80,000.  Mr Stay sees the subject land as virtually similar to a normal residential parcel, but with an additional area of land that is regularly isolated by flood waters.
           Mr Stay argues that the subject land cannot not be subdivided in view of its very small road frontage (3.5 metres), and the impact of the floodway and the Council easement along that access way.  He argues that his extensive experience in negotiations with Council on other property matters, strengthens his opinion that the subject land could not be subdivided into two separate parcels.
           Mr Stay also notes that Council requirements for dedication of lands within the floodway (about 50% of the subject land), under the Enoggera District Strategic Plan, plus the intrusion of required bikeways across the subject land as a further condition of approval, are major reasons why subdivision would not proceed.  Mr Antoni concedes that he has not sought to assess the land as separate parcels, but notes that s.34(2) of the Act provides discretion for the Chief Executive to do so if the circumstances warrant the change.
           While Mr Antoni has only assessed the value on the basis of a single homesite under s.17, he challenges Mr Stay's assumption that a future subdivision would not be possible.  Mr Antoni draws comfort from the shared easement access of his Sale 3 at Payne Road, The Gap.  He notes that in his opinion a shared easement access to the two existing dwellings upon the subject land may be a possibility.  However, in the context of the current valuation it was not a matter that he now pursues.
           When pressed Mr Antoni agrees that the subject land could be valued on the basis of a single house site on the southern side of Cedar Creek; or as a single house site on the northern side of the creek.  Mr Antoni argues that he had assessed those alternatives when concluding his assessment of $150,000.  He based that figure on the principle house site at the southern side of the creek, after allowing for the $20,000 for the road access culvert previously noted.
           Mr Antoni advises that had he valued the subject land on the basis of the northern house site, then he would have not allowed the $20,000 for the culvert costs.  His alternative value, after allowing for $5,000 for the extra filling of the house site, would then be $165,000.  Mr Antoni  now considers that if a high level bridge at $100,000 was the only alternative structure acceptable the Council, then the economics of such a conclusion would mean that only the northern house site approach would be viable to a prudent owner.
           Mr Antoni also provides a hypothetical assessment in the event that a future subdivision did prove viable.  In that case he provides either a southern side parcel of 6.465 hectares at $150,000, and a northern side parcel of 0.5 hectares at $90,000, or a total of $240,000 for the two lots.  He also assessed a north side parcel of 1.25 hectares at $115,000, plus a 2.65 hectare southern side parcel at $135,000, giving a total value of $250,000.
           Mr Antoni provides no special allowance for disability of the VPO, as he argues that there is scope allowed for by the Council for the removal of any trees which present a danger.  Mr Antoni sees the VPO more as an advantage to the amenity of the subject land, rather than as a disability.  Mr Antoni sees the seclusion of the subject land as ensuring that it is one of the best rural homesites in the area. 
           In respect of the implications of the second dwelling upon the subject land, Mr Stay expresses concern that recent environmental legislation introduced during 1995 and 1996 would prevent re-establishment of that second dwelling in the event of a major disaster such as a fire.  Mr Stay notes that under the new legislation any new building would need to be set back about 30 or 60 metres from the centre line of Cedar Creek. 

While Mr Stay was not specific in respect of that legislation, I note that protection within declared catchment areas may be demanded under s.32 of the Water Resources Act 1989. However I am unaware whether Cedar Creek is such a declared catchment area, and I would assume that any control of that floodway would be subject to the Brisbane City Council under its Town Planning powers.  Mr Antoni argues such legislation would only impact new buildings, and existing buildings would continue to have existing lawful non-conforming rights to be rebuilt.  (See s.28.1 of the Brisbane Town Plan).  

Mr Antoni therefore argues that such environmental constraints would have no impact upon the current matter.

Decision:

(i)        The Method of Valuation -
As discussed in AV99-392, the relevant approach adopted by Mr Antoni would appear to be supported by the evidence.  There currently is no legal standing in the current matter for the separate parcels upon the subject land.  While there may conceivably exist some scope for a future subdivision, say into two parcels, with shared easement access to Persimmon Street, the risk of that occurring must also be weighed against the cost to the appellant.
           Should Mr Stay seek to exercise his right to apply for subdivision, he is aware that he must cede about half of the land to Council for floodway purposes.  The further provision of bikeway tracks across the subject land, would also mitigate against the peace and tranquillity that Mr Antoni appears to assess as important in concluding the value of the two possible new parcels.  Surely that will reduce the value of such parcels, as well as reduce their size as residual rural homesites.  On that basis I would agree with Mr Stay that subdivision is not a viable option, and I will consider the land only as a single homesite.
           The question then to be addressed is whether it should be seen as a housesite to the north, or south of Cedar Creek.  On the evidence it is to the appellant's advantage for the land to be valued as a housesite to the south.  The cost of a new culvert at $20,000 would appear to be supported by the evidence.  If I was to accept that a high level bridge was required at a cost up to $100,000, I would agree with Mr Antoni that a prudent owner was likely to adopt the northern site alternative.  But that would result in an unimproved value of $165,000.
           It would seem to me that Mr Stay is faced with the decision of either accepting some limitation upon his access to his current principal homesite; or paying up to $100,000 by his own reckoning.  His other alternative is to relocate, as he spasmodically does, to his parents retreat.  The fact that Mr Stay has so far not sought to construct the bridge indicates that, as a very prudent owner, he does not see an added value of $100,000 in a new structure.  On the evidence, I believe Mr Antoni's estimate of cost for a $20,000 culvert is reasonable.

(ii)       Comparison of Sales -
There is nothing in the evidence to indicate that Mr Antoni has made an error or used a wrong principle.  The comparisons reveal that the subject land is a select rural homesite which is seen to be far superior to Mr Antoni's Sale 3 ($150,000), but from which an amount of $20,000 to overcome accessibility problems then needs to be made.  The comparison with the unimproved value in Upper Kedron Road, in my opinion, does not upset those comparisons. 
           In respect of seeking relativity with the adjoining parcels in Hogarth Road, I believe each of those parcels lack the ambience of the subject land as a rural homesite.  Each of those parcels would appear to be more severely impacted by the floodway and the VPO.  The advantage of the ridge line through the subject land also adds to its value.  I see nothing inconsistent with the current relativities.
           As to Mr Stay's comparison on the basis of similar normal residential sites of 800 square metres to 1000 square metres, I see little justification on that basis.  The attractiveness of the subject land lies in its added seclusion and privacy, and the more pleasing views and aspects from the dwelling.  I believe the market place sees added value in those attributes, and I reject Mr Stay's assessment of $80,000 on that basis.  I believe Mr Antoni has allowed any benefit of doubt in the appellants' favour in his method of valuation.  (See Commissioner of Succession Duties (SA)  v. Executor Trustee and Agency Co of South Australia (1946-47) 74 CLR 358, at 373).

Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellants have proved their case.  The appeal is dismissed, and the unimproved value of Lot 43 on RP167933 as determined by the Chief Executive in the sum of $150,000 is affirmed.

Member of the Land Court