Thomson v Minister for Lands
[1995] QLC 79
•30 August 1995
|
BRISBANE
30 AUGUST 1995
Re: Determination of Unimproved Value -
Application for conversion of tenure -
Special Lease No.: 26/52544, Innisfail.
Lessees: Kerry John and Pamela Joan Thomson
(Hearing at Innisfail)
D E C I S I O N
Special Lease No. 26/52544 is over land described as Lot 904 on Plan T9482, containing 607m2, Parish of Rockingham. The land is situated at No. 34 Taylor Street, Tully Heads, which is about 22 kilometres east of Tully.
Application was made on 18th June, 1993, for the conversion of the tenure, in terms of section 207 of the Land Act. The matter of the determination of the unimproved value of the land as at the date of application, has been referred to the Court. The Minister's determination of unimproved value was in the amount of $78,000.
Mr and Mrs Thomson attended the hearing and both gave evidence. Mrs Thomson indicated that their estimate of value was in the range of $45,000 to $50,000. The major disability of the land in their opinion was the potential for severe erosion from the sea. The land fronts a surveyed esplanade, now eroded to about 15 metres from the eastern property alignment.
There is no argument that the Tully Heads beach front had in recent years been subject to major erosion. Mrs Thomson said that a short distance to the south of the subject land the beach-front land and Tully River mouth had changed dramatically, resulting in the washing away of a toilet block, a concrete boat ramp, and roadway together with a large area of a park and recreation reserve. In about 1991, local beach-front residents had apparently at their expense, progressively constructed a 4 metre high rock seawall to protect their properties. While they had been permitted to do so these owners had, at considerable annual cost, maintained that wall. That maintenance, by topping up, was now, at the date of the hearing, not permitted, according to Mrs Thomson. It seems that this was by direction of the Beach Protection Authority. It also seems that the Authority's suggested method of future protection of the beach-front lands was for sand to be pushed by bulldozer up to the high-water mark. The Council had attempted to protect beach-front land to the north of the seawall in recent times and at significant cost, but the sand which had been pushed up was washed away overnight at a time when high seas were running. With lack of maintenance to offset subsidence of the seawall, Mrs Thomson said there is danger of erosion from behind the wall caused by its overtopping at high tides, but particularly when high winds and rough seas coincide with high tides. Photographic evidence was provided showing the very recent extent of erosion behind and beyond the end of the seawall, a short distance to the north of the subject land.
Secondary to the erosion problem but also affecting the value of the land, in the lessees' opinion, was its relatively small size then the local flooding susceptibility of a natural depression in the western (Taylor Street) section of the site. Flash flooding caused inundation of this hollow over the full Taylor Street frontage and prevented vehicular access onto the site for up to 24 hours. Due to the high rainfall in the area this was said to be a common occurrence.
The lessees had obtained considerable information regarding sales of property at Tully Heads in the period from about 1990 to the time of the hearing. Sales and resales had shown a decline in value over the period, including the value of property not directly affected by beach-front erosion. The lessees hold the opinion however, that the erosion-prone property has been subject of the more significant decline and suggest that improved property now sells, when sales are capable of being made, at little more than the replacement value of the improvements.
As an example they say, a "substantial" beach-front dwelling at No. 15 Taylor Street sold in August 1991 for $116,000 then resold in March 1994 for $96,000. A nearby beach-front dwelling at No. 24 Taylor Street had been sold for $155,000 in February 1993 and is currently listed for sale for $130,000. Included in the evidence was a sale of vacant land of 671m2 at 115 Taylor Street for $65,000 in October, 1990. This land had beach-front reserve opposite and was on the inland side of Taylor Street. Another site of 663m2 near to that sale land (at No. 125 Taylor Street) had sold for $48,000 in April, 1994. Mrs Thomson agreed that the ocean aspect from those sale sites was inferior to that available from the subject but the sale sites had no erosion potential, at least in the foreseeable future. Land on the opposite side of Taylor Street, near opposite the subject land, had sold in January 1992 for $37,500 which Mrs Thomson said was "approximately $20,000 less than the unimproved value" (it is assumed as applied by the Department).
The Department of Lands' valuation of the subject land had been based on the sale of a beach-front site at Hull Heads, northerly of Tully Heads. Hull Heads is on the southern side of the mouth of the Hull River while Tully Heads is on the northern side of the mouth of the Tully River. Both Mr and Mrs Thomson held the opinion that the beach erosion problem at Hull Heads was of a different nature and significantly less severe than at Tully Heads. Mr Thomson felt that offshore sandbanks, which existed near the mouth of the Hull River, diffused the damaging effect of high seas and provided replacement sand for the beach. Mrs Thomson did not accept that Hull Heads would be regarded as inferior to Tully Heads. She agreed that there was inland residential subdivision at Tully Heads which might suggest a statistical denser housing development, and Tully Heads was the older beach-front development, but she did not accept that it enjoyed superior amenities. Mr A.J. Dalgarno, a registered valuer employed by the Department of Lands, was the valuer responsible for the Minister's determination. His sole basis of valuation was the sale of the 546m2 beach-front site, being Lot 10 on Plan H9475, situated at Luff Street, Hull Heads, on 22nd August, 1991 for $71,000, analysed to show an unimproved value of $70,000. In his opinion, while in more recent times levels of value for comparable land had come closer together, Tully Heads was historically the superior location in terms of market value. He referred to what he described as a generally better style of residential development at Tully Heads as supporting that opinion. He agreed that there had been a decrease in level of value at Tully Heads, but he had interpreted the market as having bottomed during 1992 into 1993. He did not disagree that the relevant date of valuation could be accepted as at the bottom of the market, but he felt that improvement in that market had occurred subsequent to that date. He referred to a decrease in land values of between 10% to 15% from the late 1980s through to 1993. He also agreed that the level of market value for the sale land at Hull Heads might have been expected to fall, possibly to about $65,000 between the date of sale and the relevant date of valuation in this matter. Nevertheless, that site had resold in November, 1994 for $85,000. Mr Dalgarno had no doubt that the sale offered a reasonable basis of valuation and provided the most comparable evidence of value. Hull Heads was not free of erosion problems. He had in his possession 1974 aerial photography which showed that three lots, a short distance to the north of the sale land, and closer to the river mouth, had been severely eroded at that time. Those blocks had since been reclaimed. There was no rock seawall protection at Hull Heads and at the time of the sale, the esplanade boundary of Lot 10 had been about 10 metres from the line of the beach-front bank erosion. That had worsened to about 2-3 metre separation since the sale. He could not comment on the natural forces affecting the degree of erosion at either Hull Heads or Tully Heads, but it seems that he accepted the erosion scour at Tully Heads was more severe. Mr Dalgarno was aware of the flash flooding disability at the Taylor Street frontage of the subject property although he did not see it as having any significant effect on the unimproved value, being, in his mind, a somewhat common problem along Taylor Street in that locality. He did agree that the hollow on the subject property might be a little deeper than on adjoining lots, but with the sandy nature of the soils the flash flooding effects would be expected to clear relatively quickly.
The lessees have a difficult task in this matter. They have endeavoured to provide an evidentiary basis for their opinions as to value and take no comfort from the sale at Hull Heads, preferring to rely on improved sales (dwellings) and sales of vacant land further removed from the eroding beach. They are, in 1995, fearful of the potential for the erosion problem to eventually destroy their asset, if the rock wall protection is not adequately maintained.
The task of the Court is to determine an amount which experienced persons would be willing to pay for an estate in fee simple in the land if it was offered for sale, as at 18th June, 1993, on the reasonable terms and conditions a bona fide seller would require.
An experienced person would not ignore what was paid for a site adjacent to an eroding beach at Hull Heads, in August 1991. The fact that the market had declined since that date, would also be taken into account. The experienced person would consider the sales of sites, on the inland side of Taylor Street, particularly those with aspect across the esplanade reserve. In my opinion, the conclusion would be reached that, save for the erosion disability, the subject land was more exclusive and more valuable than those inland sites. As at June, 1993, it would be seen that, in an unprotected condition, erosion at Tully Heads was more severe than at Hull Heads, but to counter that, seawall protection had been provided. An annual, individual, maintenance cost was involved at that time in maintaining the seawall protection.
Now, while it is a somewhat precise figure, I can accept that Mr Dalgarno's valuation of $78,000 is well founded even though based on a single sale. It seems to me to be more realistic than is the lessees' estimate. Mr Dalgarno was aware of the disabilities of the site at the relevant date and, in my opinion, better placed to consider factors affecting the value of land from a market perspective.
I see no reason then to disturb the determination of $78,000 because it seems to me to have been within a reasonable range of value, at that time.
There is however seen to be the need to make further comment. The position which existed as at June 1993 is not, as I understand the evidence, that which existed as at the date of hearing in 1995. It seems to me that in 1993 no prudent person would then have envisaged a situation developing which would deny beach-front land owners the then existing and necessary practice of maintaining, at their cost, the existing seawall. If there is in 1995 some bureaucratic generated reason for maintenance to be denied, and the lessees seem to have no doubt that that is the case, then their fears as to erosion potential are well founded. It might be envisaged that those beach-front land owners would make the strongest possible protest to the relevant authority or authorities to ensure that the previous maintenance practice was able to be continued.
There would seem no doubt that if the risks of erosion damage are now so great as is suggested, then the unimproved value of the land in 1995 would be significantly less than has been determined in this matter. If no satisfactory result is possible with regard to maintenance of the erosion protection, Mr and Mrs Thomson will no doubt wish to reconsider any perceived advantages in committing capital to the conversion of tenure.
As already stated however, the unimproved value of the land as at 18th June, 1993, is determined in the amount of seventy-eight thousand dollars ($78,000).
MEMBER OF THE LAND COURT
0
0
0