Texdon Pty Ltd v Chief Executive, Department of Natural Resources
[1997] QLC 26
•4 March 1997
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BRISBANE
4 March 1997
Re: Appeal against Annual Valuation
Valuation of Land Act 1944
Valuation Roll No: 19216
Local Government: Logan
(AV96-238)
Texdon Pty Ltd
v.
Chief Executive, Department of Natural Resources
D E C I S I O N
Background:
The key issues in this appeal relate to the comparison of comparable sales, relativity, recognition of the impact resulting from the use of adjoining properties, and access to the land. The appeal relates to a property at 85 Koplick Road, Park Ridge, Logan City, and described as Lot 15 on RP 135029. The land is zoned as "Rural" under the City of Logan Town Plan of 17 December 1988.
The lot is used for rural residential purposes, and a second dwelling has been erected on the land. The land was valued on 19 February 1996, as a single rural residential homesite by the Chief Executive, Department of Natural Resources. The land is located about 28.5 kilometres in a direct line from the Brisbane GPO, and is about 3.5 kilometres in a direct line south-west of the Marsden Post Office. Vehicle access to Koplick Road is good and the land is about 1.8 metres above the level of Koplick Road, which has dual-width bitumen-sealed carriageway, but no formed footpath in front of the subject. Lot 15 also fronts Beaumont Road to its north, but there is an access restriction strip between Lot 15 and Beaumont Road which is vested in the Logan City Council.
Access along Beaumont Road is restricted physically by the narrow gravel pavement, and natural drainage crossings which contain permanent water even in dry periods. The clearing of timber along Beaumont Road is narrow, and Logan City Council discourages residents from using Beaumont Road for access to the properties. Because of the access restriction strip the subject has no legal access to Beaumont Road.
The subject is located on the side of a hill, sloping from east to west, and falls from Beaumont Road towards Koplick Road. The present site until recently had no reticulated water connected and depended upon bore water, although evidence was given that Logan City Council had agreed to connect the site to a reticulated main in Beaumont Road, subject to the appellants providing an easement in favour of the Council, and the appellant paying the costs of constructing the water pipe. Reticulated water is now connected to the subject.
The Chief Executive, Department of Natural Resources, on 19 February 1996, issued a valuation notice for $165,000. Following an objection conference the Chief Executive on 2 July 1996, declined to amend the valuation. However, after further consideration, the Chief Executive under s.68 revised that figure and on 17 February 1997, issued an amended valuation for $160,000. This is now the formal valuation against which the appellant has appealed.
Evidence:
The appellants argue that the Department has not accurately assessed certain physical factors which currently impact upon the value of the land and, when compared to other parcels nearby, the relative value of the subject is excessive.
The appellants draw notice in particular to a large shed which is currently under construction on the adjoining Lot 14. Approval for construction of the shed for a produce and nursery and grocery and fruit store was obtained from the Logan City Council during 1995. Development works have apparently only recently been completed by the Logan City Council and the appellant is led to believe that approval for the "business" will issue shortly. The shed is about 6 metres high and within a few metres of the subject's boundary (photograph supplied).
The appellants claim that future detriment will occur to the subject as a result of noise, dust and traffic movements associated with the shed. The respondent acknowledged the presence of the shed, but felt it may not constitute a nuisance to the subject as the residence on Lot 15 was set well back from the road. As the shed was not yet in operation, the valuer, Mr Crothers, felt that negative impacts upon the subject should be considered later. He conceded that in the future, if nuisance impacts were seen to impact the subject, he would reconsider his valuation of the subject to allow for any detriments. The appellants' claim that damage has already occurred to the subject with the granting of the approval to develop.
The appellants also gave evidence that a new church school is being erected on Lot 17 which is one lot removed from the subject. Photographic evidence was provided showing a building which has recently been relocated on to Lot 17. The concern of the appellants was that the school would have a possible impact upon the amenity of the subject as a result of children passing the subject, vehicles dropping off and picking up children, dust and noise. If existing timber is cleared from Lot 16 between the subject and Lot 17, the visual privacy of the appellants will be impaired. The appellants claim that information obtained by them suggests the new owner of Lot 16 intends clearing most of the existing timber when building a new home.
Mr Crothers, under cross-examination, suggested that a school site, one lot removed, would in his opinion not cause any major disadvantage to the subject, and would have a minimal impact upon the value of the subject. He did not believe that extra traffic generated by the school would be a problem, but conceded that at a later time, once the school commenced operations, he would reconsider that matter.
The matter of access to Beaumont Road was clearly in dispute between the parties. The appellants gave evidence that because of the access restriction between the subject and Beaumont Road, it was economically impossible for a single owner to meet the requirements of the Logan City Council in respect of road improvements to Beaumont Road, in order to gain legal access to Beaumont Road. As a consequence they have had to resort to constructing a physical access to Koplick Road from the second dwelling on the northern part of the subject. A new proposed subdivision of Lot 15 into a new Lot 100 and new Lot 15 was provided as evidence (Exhibit 2, 3). This demonstrates the legal need to provide easement access (Easement A) for new Lot 100 to Koplick Road.
Both parties agree that physical access along Beaumont Road is merely tolerated by the Logan City Council who discourage its use in preference to Koplick Road.
In arriving at his valuation of the subject, the valuer, Mr Crothers, compared directly with sales of vacant land sold in the Park Ridge area within the relevant time period. He disregarded sales of improved properties in favour of vacant sites which is the preferred method; i.e. PH Clough v. The Valuer-General - Caboolture Shire (1981-82) 8 QLCR 70 (LAC) at p.76:"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. The reason is obvious. In applying such sales there is no room for error in analyzing the value of improvements. "
Mr Crothers selected only parcels which are to be used for single rural residential purposes. In examining other sales nearby to the subject, he rejected sales of en globo land which were suitable for subdivision in Chambers Flat Road.
These lands in Chambers Flat Road, particularly Lots 13 or Lot 14, on RP 82892 were sold for approximately $55,000 per hectare, and Lot 6 on RP 94215 sold for a similar amount. Other sales of en globo land in Green Road were also rejected as they had sold for approximately $70,000 per hectare and therefore out of line with the market for rural residential homesites. Whilst the Chambers Flat Road was nearer to the subject than two of his chosen sales, he rejected the en globo land sales in Chambers Flat Road and Green Road as not representative of rural residential homesites, and which, because of the higher price paid, would have unjustly inflated the valuation of the subject.
The following sales evidence was provided by the respondent:
•Sale 1 - Koplick Road, Park Ridge - Lot 16 on RP 135029.
This adjoins the subject to the east, is a regular block similar in shape to the subject, but is on the crest of a ridge and is overall slightly superior to the subject. It rises easily from south to north and a slight fall both to the east and to the west. It has similar access and amenities, and sold for $195,000. There is an old dwelling in disrepair upon the land. It has an area of 4.837 hectares and is zoned as Rural.
•Sale 2 - Green Road, Park Ridge - Lot 34 on RP 103382.
The sale is located about 9 kms to the north-west of the subject, and is a hatchet-shaped lot on the crest of a ridge which rises easily from south to north. The sale has superior location and topography, but is inferior in size to the subject. Overall it is seen as superior to the subject. It has an area of 2.87 hectares and is zoned as Rural. It sold for $227,000.
•Sale 3 - Green Road, Park Ridge - Lot 27 on RP 103382.
The sale is located about 8.5 kms north-west of the subject, and is about halfway up a rise. The topography is level with the road and rises easily from north to south. The land is superior in location, but inferior in size and it is claimed to be inferior to the subject. It has an area of 1.7 hectares and is zoned Rural. It sold for $165,000.
It is agreed by both parties that the Green Road area is overall superior to the Koplick Road area, and is nearer to Residential A land immediately across Green Road and to a shopping centre. While sewerage is available in Green Road, it is not available to either Sales 2 or 3.
In the matter of existing land uses, it is noted that the subject is zoned "Rural" under the City of Logan Town Plan of 17 December 1988, and as such cannot be subdivided as-of-right into parcels less than four hectares. However, under the Strategic Plan of the Logan City Council of 19 December 1994, it is designated "Rural Residential", which, subject to Council approval, can allow subdivision into one hectare allotments. The current proposal to subdivide by the appellants is under this latter Strategic Planning arrangement.
The adjoining Lot 16 is currently occupied by an old dilapidated dwelling which is rented to tenants. There have been discussions with Logan City Council in respect of whether the building will be allowed to continue as a residence. Following these discussions, the valuer, Mr Crothers, placed a nominal value of $20,000 on the building, which he was informed by the agent who handled the sale to the new owner, would eventually be demolished to make way for a new residence for the owner.
In respect of the use of the subject, unfortunately, the valuer, Mr Crothers, was denied access to inspect the property personally, because of his belated request to do so just prior to the hearing. The appellant considered to do so may in some way have prejudiced his case before the Court. Mr Crothers had to inspect the property from the road and from Lot 16. In hindsight this was perhaps unfortunate, as Mr Crothers was unaware that the appellants in fact used the subject as part of a commercial enterprise in association with about 10,000 acres of other property in Queensland. The subject is used to grow trees in pots which are then transported to the other properties. Had this been brought to the Department's notice, the appellants may have been able to seek concessions to their valuations as a primary producer, under s.17 of the Valuation of Land Act. The appellants were apparently unaware of these provisions and the requirements of justification as a primary producer under that Act. The appellants were also unaware that parcels to the west of the subject in Lots 12, 13 and 14 are valued as primary production areas with values between $92,000 and $94,000, although the appellants noted that the subject often suffered problems from dust when the owners of Lot 14 ploughed their land.
Decision:
In the matter of future adverse impact upon the subject by the proposed shed for produce and nursery and grocery and fruit stores on Lot 14, and also for a proposed church school on Lot 17, the concerns of the appellants may well be realised once those enterprises commence operation. The respondent has conceded that should such be demonstrated, he would re-assess the impact upon the subject. Because the enterprises have not yet commenced, the quantum of such intrusion cannot be assessed.
However, in the event of the appellants themselves seeking relief as a primary producer for a nursery under s.17, they would need to demonstrate the extent of impact of a produce and nursery and grocery and fruit store upon their enterprise. The matter of a future school would be assessed separately.
The appellants' concerns have substance in that, while the enterprises have not commenced, the very existence of an official approval to proceed from the Logan City Council does constitute a legal matter which may or may not influence any future prudent purchaser of the subject. However, unless that formal approval is fully exercised, it is difficult to quantify any impact. While the appellants concern relates to a future "potential" negative impact upon the subject, there is some guide in precedent in respect of "potential" positive impact, and its consideration in establishing the value of the land under the Valuation of Land Act. The principle was upheld by the Land Appeal Court in Universal Building Co Pty Ltd v. The Valuer-General - Shire of Albert - (1963) 30 CLLR 160 at p.166:
"It seems to us that land should not be valued in any period as possessing a potential if realisation of the potential is not likely to commence within the period covered by the valuation. "
The respondent conceded that if the two enterprises did cause a nuisance then the subject was likely to suffer most in Koplick Road.
The matter of access to Beaumont Road is a restriction upon the appellants in respect of seeking a legal right to enter upon Beaumont Road. This clearly has impacted the appellants' proposal to subdivide Lot 15 into two parcels in order to provide separate titles to the two dwellings now upon the land. It would be quite improper for the valuation of Lot 15 to consider the second access along Beaumont Road as an important factor at arriving at the valuation. However, from the evidence, Mr Crothers has not considered the multiple occupancy of Lot 15 in his workings, and has valued the subject as a single rural residential dwelling with access to Koplick Road. I feel the matter of potential access to Beaumont Road has no impact upon the valuation for that purpose.
In considering the sales evidence supplied by the respondent, I note that, while the three sales are all for single unit rural residential purposes, and therefore have been valued on a site basis, and not on a per hectare basis, in accordance with AT Dewar v. The Valuer-General (LAC) (1980-81) 7 QLCR 112 at p.115:
"The market for rural homesites demonstrates that they are purchased on a site basis and not on a pro rata per hectare basis. "
and also in DF and M Ward v. The Valuer-General (LAC)(1983) 9 QLCR at p.48.
Under the rural zoning the area around Green Road (Sales 2 and 3) is seen generally as superior to the Koplick Road area. However, the sale adjoining the subject (Sale 1) indicates the market in the Koplick Road area, while the smaller area of Sale 3 in the superior area of Green Road supports a market similar to the subject.
The appellants sought comparison of some vacant lots in Hubner Road, which occurred prior to the relevant time period, and were not considered relevant to the valuation. They also sought to challenge the sale of Lot 16 (Sale 1) as representing a special circumstance which may have influenced the new owner to pay a higher price than the market indicated. On examination the matters are hearsay and did not, in my view, discredit the sale of Lot 1, and do not "justify the inference that the sale of (Lot 16) was an excessive one". Hurdis v. The Minister 2 LGRA p.132.
The appellants sought to support their estimate of $100,000 for the valuation by the use of hearsay values for improved properties in Koplick Road or Chambers Flat Road. However, they provided no evidence to compare those properties with the subject. When questioned on the unimproved value, if derived from a potential sale of the subject, the resulting value was inconclusive.
In view of the use of the comparison of vacant sales as the preferred method of assessing valuation, I am persuaded that the respondent's sales evidence supports the valuation effectively. This was supported in PH Clough v. The Valuer-General, supra, and also in R and MM Barnwell v. The Valuer-General (1989) unreported, and later upheld by the Land Appeal Court (1990-91) 13 QLCR 13 at p.18:
"It is again well established that when valuing homesites, then the best method of comparison is on a site to site basis. "
In the matter of the use of the land, and its impact upon relativities in the area, it is agreed that adjoining parcels to the west of the subject enjoy concessional valuations by satisfying section 17 of the Valuation of Land Act. It is noted that the appellants may seek to avail themselves of similar concessions for the subject, and that the onus will then be upon them as outlined in the decision of the Land Appeal Court in Chief Executive, Department of Lands v. KW and MR Whackett (1995), AV93-163 and AV93-164, unreported.
It is agreed that the adjoining Lot 16 is likely to be used as a single rural residential site and is only slightly superior to the subject because of its position on the crest of the ridge. The valuer, Mr Crothers, made an allowance of $5,000 in reducing the value of Lot 15, compared to Lot 16. As Lot 16 was valued by him at $175,000 (Sale 1), then Lot 15 should be valued at $170,000 in order to maintain relativity. The Department has applied a conservative unimproved value on Lots 15, 16 and 17 at $160,000, which would appear appropriate for the subject.
Summary:
In determining amendments or alterations to the valuation, the onus of proof rests upon the appellants, under section 33 of the Valuation of Land Act 1944:
"Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered. "
In summarising, I believe that the appellants have failed to satisfy the onus of proof that the Chief Executive has failed to take full consideration of all the factors affecting the subject in accordance with the Act.
Conclusion:
After having considered the whole of the evidence, the appeal is dismissed and the unimproved value of Lot 15 on RP 135029, as determined by the Chief Executive, Department of Natural Resources, in the sum of $160,000 is affirmed.
Member of the Land Court
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