Van Der Klugt v Chief Executive, Department of Natural Resources and Mines

[2002] QLC 39

LAND COURT BRISBANE 21 MAY 2002

Re:     Appeal against an Annual Valuation

Valuation of Land Act 1944 Shire of Livingstone (V2000/0621)

Aileen J and John AM Van Der Klugt v.

Chief Executive, Department of Natural Resources and Mines

(Hearing at Rockhampton) D E C I S I O N

This is  an appeal  by landowners  in the  Shire of  Livingstone against  the unimproved value applied by the Chief Executive, Department of Natural Resources and Mines (the respondent), to their land at Emu Park under the provisions of the Valuation of Land Act 1944.

Background

Mr and Mrs Van Der Klugt are the owners of land described at Lot 78 on Crown Plan E15611, Parish of Hewittville, County of Livingstone, containing an area of 2,378 m². As at 1 October 1998, the respondent had valued that land under the provisions of s.37 of the Act at $35,000. The owners complained about that valuation and the respondent subsequently amended the valuation to $28,000. Following an unsuccessful objection against that valuation, the owners appealed to the Land Court advising that their estimate of the unimproved value at the relevant date was $10,000.

The owners' grounds of appeal related to the failure of the Council to provide proper infrastructure to the subject land, which suffers from severe inundation following heavy rain.

The Relevant Legislation

The responsibilities of the respondent are set out in the various provisions of the Valuation of Land Act 1944. The respondent is required to make annually, or periodically, a valuation of all land in a local government area: s.37. For the purposes of the Act, the valuation of each parcel of land is to be the "unimproved

value" of that land, which is defined to mean in relation to unimproved 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 improvements on that land did not exist: s.3(1). However, the unimproved value shall in no case be less than the sum which would be obtained by deducting the value of improvements from the improved value at the time at which the value is required to be ascertained: s.3(2).

The "value of improvements" means the added value which the improvements give to the land, irrespective of the cost of the improvements. However, the added value shall in no case exceed the amount that should reasonably be involved in effecting improvements of a nature and efficiency equivalent to the existing improvements: s.5. The Act thus requires the respondent to ascertain the unimproved market value of each parcel of land as at the date of valuation, assuming that the improvements on the land had not been made, but also assuming the existence of all present facilities and amenities external to the land, such as roads, power and other services, and also assuming that the adjoining land and the environs are in their existing condition.

The test of "market value" was laid down by the High Court in Spencer v. The Commonwealth (1907) 5 CLR 418. The High Court found that the market value of land at a particular date is the amount that would have been paid for that land if it had been sold by a willing but not over-anxious seller to a willing but not over-anxious purchaser, both of whom are fully acquainted with the land and aware of all the circumstances which might affect its value, either advantageously or negatively. It is well-settled law that sales of vacant or lightly improved land provide the best basis for the assessment of unimproved value: see Grahn v. The Valuer-General (1992) 14 QLCR 327.

Under s.28 and s.29 of the Act, the respondent may at any time alter the valuation of any land for reasons which are set out in s.28. When this occurs, the owner of that land has the right to challenge the new valuation by way of objection and appeal, as has occurred in this case.

The Subject Land

The property, the valuation of which is subject to this appeal, is situated at 11 Park Street, Emu Park, approximately 1 km north-west of the Emu Park business

district.  The surrounding locality has been developed predominantly with single-unit dwellings.

According to the report of the respondent's witness, registered valuer Mr M McCosker, the property has frontage to both Park Street and Clay Street, but its access is from Park Street, which is bitumen sealed, with concrete kerbing and channelling. There is an earth channel with drains between the kerbing and channelling and the allotment boundary. The Rockhampton/Emu Park Road is about 500 metres south of the subject land. Access is considered to be all weather.

Mr McCosker described the property as a larger than average size, irregular shaped inside allotment, with a gentle slope from the north-east (Clay Street) to the south-west (Park Street), with a good building contour. It has no views or outlook worthy of mention.

Mr McCosker explained that the locality has drainage problems. The allotment to the west of the subject land, Lot 77, with an area of 2,959 m², also with frontages to both Clay Street and Park Street, is a drainage reserve, on which an earth stormwater drain had recently been excavated to take water from areas to the east from Clay Street through to Park Street, which has the drain on the footpath. He commented that he considered that the periodic local flooding that affected the subject land should be improved, although the stormwater drain was now very visible.

The subject land is zoned "Residential A" under the Shire of Livingstone Town Planning Scheme and is developed with a single-unit dwelling. Reticulated town water, sewerage, electricity and telephone are connected. There is a daily mail service and a weekly garbage collection service.

The Respondent's Valuation

Mr McCosker relied on the direct comparison with two sales of basically unimproved land in Emu Park to support his valuation of $28,000. Sale 1 is situated in Warnock Street, to the south of the subject land. It has an area of 1,179 m², is zoned "Residential A" and sold in August 1998 for $25,750. Mr McCosker analysed that sale to show $24,000 and as at 1 October 1998, the respondent had applied an unimproved value of $20,500 to that property.

Mr McCosker described that allotment as a hatchet-shaped inside lot, with a fair building contour. Although its legal access is from Warnock Street, its actual access is from Hartley Street, over a drainage reserve which abuts the allotment.  He

considered the sale to be inferior to the subject land because of its size, shape and access.

Sale 2 is situated in O'Donnell Place, also to the south of the subject land. It is in a cul-de-sac and has an area of only 751 m². It is zoned "Residential A" and sold in February 1998 for $28,000. Mr McCosker analysed that sale to show $27,250 and as at 1 October 1998, the respondent had applied an unimproved value of $27,000 to that property.

Mr McCosker described the sale allotment as an irregularly shaped, inside lot, having a gentle cross slope from east to west, with a fair building contour. It is in a newly established residential estate at the end of a cul-de-sac. He considered it to be similar in value to the subject land. Although it did not suffer from the same water problems, it is much smaller.

The Appellants' Case

Mr J Van Der Klugt appeared on behalf of the appellants. He explained that the subject land has suffered from water problems since before the house was built on the land 18 years ago. Whenever there is heavy rain, the run-off from the areas to the north inundates the subject land. The adjoining allotment to the west, Lot 77, was shown as a watercourse on the original maps dating from about 1890, indicating that the vicinity was a drainage problem area.

Mr Van Der Klugt's argument is set out in Exhibit 4. He explained that the appellants purchased the land in late 1983, one condition of the sale being that there was building approval. In 1983 the Council upgraded Clay Street by elevating the land and placing a culvert on the northern boundary. Mr Van Der Klugt considered this was neglect by the Council. He complained to the Council about the placement of the culvert.

In 1986 the Council decided to develop the lower side of Clement Street to the north. With the increase in impervious surfaces which resulted from the improvement of the roads in the area, such as Fountain, Pear, Redman and Gap Streets, and with little or no vegetation to absorb any run-off, the problem of water inundation has been getting worse.

In 1996 the Council decided to bitumen Park Street, placing a stormwater drain in front of the subject land. However, as there was no drainage infrastructure in Clay Street, the water has to encroach on residential allotments before reaching the drain in Park Street.

Mr Van Der Klugt said that there has been much correspondence between the Emu Park Ratepayers' Association and the Livingstone Shire Council, relating to water and associated problems. He questioned why the problem has been allowed to go on for so long. He believes the Council has failed in its duty of care over the past 18 years. He is also concerned about the medical problems which result from the inundation. During a period in which he had the house on the subject land rented, the tenant terminated her lease because her daughter contracted dengue fever, which was related to the water hazards.

Mr Van Der Klugt is very concerned that the Council will further increase the impervious surfaces. It has taken 17 to 18 years for it to supply a minor drain. The area of concern is approximately 30 ha from Redman Street, Gap Street, William Street, Pear Street, Morris Street, Fountain Street, Clay Street and Park Street onto Brown Street, all of which is serviced by the culvert in Clay Street. He said some of the residences in these streets are still on septic systems and there is no control of effluent discharge. He suggested that before there is any more development of impervious surfaces, the Council should put in place the necessary infrastructure; it should abandon the Q100 flood level building restriction and adopt the Q10 level or the Q15 level.  He further suggested that the drainage in Clay Street should consist of a holding pit, with water piped to Brown Street. The existing drainage in Clay and Park Streets should be used only in extreme emergencies.

Photographs shown to the Court (but not tendered) indicate the extent of the problem of inundation after heavy rain and the drains which the appellants have constructed at their own expense to divert water around the house. According to Mr Van Der Klugt, water lies on the land for up to 10 hours after rain.

The Issues

Mr Van Der Klugt contends that the water inundation suffered by the subject land has rendered it virtually valueless. Mr McCosker has inspected the land and the locality. He concluded that the original unimproved value of $35,000 was excessive and reduced it because of the problems suffered by the subject land. He also reduced the valuations of other properties in the area which suffered from the same problems. While he agreed with all that Mr Van Der Klugt said about the water problems, he concluded that by comparison with sales in the Emu Park area, the unimproved value should be $28,000.

Unfortunately, Mr Van Der Klugt was not able to refer to any sales in the vicinity. Although the sales relied on by Mr McCosker were not directly comparable, they are the only sales in evidence and his reasoning seems to be sound: see Grahn v. The Valuer-General.

In my view, Mr Van Der Klugt's main argument is with the Council rather than with the valuation of the subject land. He alleges that the Council is responsible for not properly alleviating the inundation problems which affect the area. Those problems have an effect on the value of the land, but the evidence does not indicate that the respondent's valuation is excessive.

In the circumstances, I am satisfied that the unimproved value of $28,000 is reasonable and that the appeal should be dismissed.

Order

The appeal is dismissed and the unimproved value of the subject land as at 1

October 1998 is affirmed at Twenty-eight Thousand Dollars ($28,000).

JJ TRICKETT PRESIDENT OF THE LAND COURT