Copley v Valuer-General (No 2)
[2020] QLC 42
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- Unreported Judgment
- Copley v Valuer-General (No 2)[2020] QLC 42
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Copley v Valuer-General (No 2)[2020] QLC 42
Copley v Valuer-General (No 2)[2020] QLC 42
LAND COURT OF QUEENSLAND
CITATION: | Copley & Anor v Valuer-General (No 2) [2020] QLC 42 |
PARTIES: | Gregory Charles Copley (appellant) |
Denise Cheryl Copley (appellant) | |
v | |
Valuer-General (respondent) | |
FILE NO: | LVA675-19 |
DIVISION: | General Division |
PROCEEDING: | Appeal against objection decision on a valuation under the Land Valuation Act 2010 |
DELIVERED ON: | 1 December 2020 |
DELIVERED AT: | Brisbane |
HEARD ON: | 22 October 2020 Submissions closed 6 November 2020 |
HEARD AT: | Brisbane |
MEMBER: | JR McNamara |
ORDERS: |
|
CATCHWORDS: | REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – where appellants objected to valuation – where the initial valuation was amended on objection – where appellants appealed the amended valuation – where the subject property had previously been subject of appeal to Land Court – where the valuation impact of flooding, transmission lines and odour had been previously considered by the Court – where flood impacts and transmission lines impacts had been considered in amended valuation – whether transmission and odour impacts had been sufficiently accounted for – where they had – whether impact of flooding had been sufficiently accounted for – where it had not REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – where the appellant argued that maintenance of relativity relevant – whether the principle of relativity should be preferred to the exclusion of comparable sales evidence – where it was not REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – impact of flooding – use of available flood impact data – whether flooding data accurate – where no finding was made – where a reasonable prudent purchaser would use available flood data Land Valuation Act 2010 s 18, s 22, s 170(b) Land Court Rules 2000 r 24J Copley v Chief Executive, Department of Lands [1996] QLC 69, considered Copley v Department of Natural Resources and Mines [2007] QLC 110, considered Ladewig v Department of Natural Resources, Mines and Water [2007] QLC 47, considered WM and TJ Fischer v The Valuer General (1983) 9 QLCR 44, applied Chief Executive, Department of Main Roads v Body Corporate for Golden Sands Community Title [2000] QLAC 81, followed |
APPEARANCES: | G Copley, the appellant (self-represented) S Zafar, Lawyer, In-house Legal, Department of Natural Resources, Mines and Energy, for the respondent |
- [1]Judicial Registrar Smith made orders by consent setting this matter down for hearing.[1] Initially listed for 18 September 2020, the hearing was adjourned to 22 October 2020 due to illness of the appellant, Mr Copley. Costs incidental to the adjournment were reserved.
Background
- [2]The appellants, Gregory Charles Copley and Denise Cheryl Copley, are the owners of 7.375 hectares at 23 Arthur Road, North MacLean,[2] the subject site. They appeal the respondent Valuer-General’s 1 October 2018 valuation of their property and were represented by Mr Copley at the hearing.
- [3]Relevant dates are as follows:[3]
Date of Valuation | 1 October 2018 |
Issue of Valuation | 6 March 2019 |
Date of Effect | 30 June 2019 |
Objection lodged | 2 April 2019 |
Last Date of Inspection | 19 June 2020 |
Decision on Objection Issued | 22 May 2019 |
Appeal Lodged in Land Court | 3 September 2019 |
- [4]Importantly, the issued valuation was reduced on objection from $430,000 to $370,000 after consideration of the comparable sales evidence and the effect of flooding and power lines on the subject site.[4] A letter from the Valuer-General dated 3 July 2019 addressed to Mr and Mrs Copley informed them that the valuation amount was altered to $370,000.
- [5]The appellants’ property is well known to the respondent. It has been the subject of two previous appeals to this Court, and the subject of at least one other valuation objection.
- [6]The expert valuer called to give evidence for the respondent, registered valuer Mr David Andrew Fitzgerald, had also completed the valuation of the subject site that was the subject of the appeal to the Land Court in 2007. He is also the valuer who made the initial valuation and the decision on objection which is the subject of this appeal. Mr Fitzgerald gave evidence at the hearing and when asked, confirmed that he was familiar with the subject site,[5] and said that in his initial valuation he did not factor in sufficiently flood and transmission lines issues, but corrected this upon review, reducing the valuation.[6]
Grounds of appeal
- [7]
- [8]Despite being informed on 3 July 2019 that the valuation had been reduced from $430,000 to $370,000, the appellants’ grounds of appeal are premised on the initial valuation.
- [9]The grounds of appeal raise 4 categories of issues: flood-related issues; nuisance factors, transmission lines and excessiveness of the valuation.
Flood related issues
- [10]Grounds 1-3 allege the valuation of certain other flood affected properties in the area support a conclusion at ground 4 of bad faith on the part of the respondent in the valuation of the subject site.
- [11]Ground 5 claims the valuation fails to take account of a relevant consideration, that is, that local government regulations would not now allow construction on the subject site as ‘all weather access’ is not enjoyed.
- [12]Ground 7 alleges information published by the Logan City Council concerning the 1974 flood level, relied upon by the Valuer-General, is wrong “and the true level of the 1974 flood is approximately 1,600 millimetres higher than that claimed by the Logan City Council”.[8]
Nuisance factors - odour
- [13]Ground 6 claims the valuation ignores the odour impact that two large mushroom farms have on the subject site, and “the devaluing of the Rural Residential ‘A’ Estate by Council approving Noxious Industrial Use extension to the immediate West of the Subject Site”.[9]
Transmission lines
- [14]Ground 8 concerns the valuation impact of three “very dangerous high powered (transmission) lines which transgress … the property”.[10]
The valuation is excessive
- [15]The appellants estimate the correct site valuation to be $300,000 and in doing so assert that the respondent’s valuation is excessive.[11]
Orders and material
- [16]The parties were required to file and serve their statements of evidence and any documents they wished to reply upon at the hearing by 4 pm on 30 July 2020.[12]
- [17]On 31 July 2020 Mr Copley filed what he described in covering correspondence as “plans, photographs, and written material the Appellant intends to rely on at this hearing”. In that covering correspondence he said: “I wish to disclose a 1974 flood film which I have in VHS Video format and forms part of my evidence in the matter”.[13] Mr Copley also disclosed the addresses of four properties he says he would reference for valuation comparisons. Mr Copley also said he sought discovery from the respondent.
- [18]The respondent Valuer-General filed an expert valuation report on 30 July 2020.[14] The report analysed three comparable sales, none of which coincided with Mr Copley’s four sales.
- [19]Each party was required to file and serve their statements of evidence in reply, if any, by 4 pm on 28 August 2020.
- [20]The respondent filed a statement of valuation evidence in reply on 28 August 2020.[15] However, no material was filed by the appellants.
- [21]At a hearing review before Member WA Isdale on 11 September 2020, Mr Copley advised that he had almost finished preparing two affidavits which he intended to rely on at the hearing and would have copies for the respondent and the Court on the day of the hearing. Member Isdale advised the appellant that in accordance with rule 24J of the Land Court Rules 2000 evidence to be relied on must be provided to the Court and the other party at least 21 days before the date set for hearing.
- [22]
The appellant’s material
- [23]The relevance of much of the material filed by the appellants on 31 July 2020 does not become apparent until consideration is given to Mr Copley’s 7 September 2020 and 14 September 2020 affidavits.
- [24]The affidavit sworn 14 September 2020 is said to address appeal grounds 1–6 inclusive, and the affidavit sworn 7 September is said to address grounds 5 and 7, pertaining to flood levels. Both affidavits speak to ground 5, all weather access. Ground 8, regarding transmission lines, is not addressed in either affidavit.
- [25]The 14 September 2020 affidavit details three comparative sales, notes a fourth sale at 36–52 Trace Road, North MacLean previously listed had been withdrawn,[18] and addresses the three comparable sales advanced by the respondent.
- [26]The 7 September 2020 affidavit outlines in greater detail the appellant’s basis for contending that 1974 flood information adopted and made available by the Logan City Council is inaccurate. Annexures to the affidavit include a number of photos, statements, reports, maps and plans created since 27 January 1974.
- [27]At the hearing the appellant sought to introduce an affidavit sworn 21 October 2020. The affidavit had not been provided to the respondent ahead of the hearing. I adjourned the matter for a short time to allow the respondent to consider the material and to make any submission regarding its admissibility.
The respondent’s material
- [28]
- [29]According to the report: the land area is 7.3750 hectares; it is classified as Rural Residential – Cottage Rural Precinct; it is an irregular shape; it is accessed via Arthur Road, a dual lane bitumen carriageway; and it has a history of flooding. The report notes that in 2016 the ‘flooding level was changed’ from the 1974 flood to a 1% expected probability defined flood level.[20]
- [30]This last statement appears to be explained in a file note taken by Mr Fitzgerald dated 18 August 2020. The file note refers to a conversation between Mr Fitzgerald and Mr Dominic Morris, a Flood Officer, Logan City Council. The file note relevantly says:
“… the current flood mapping from the Logan City Council does not take into account any single flood event. The mapping now measures the probability of flooding in a 1:100 year event. He said that this change was made in 2016”.[21]
The note continues:
“In his view the high point surrounding the house would have been outside the flood area in both the 1974 and 2017 floods”.[22]
- [31]The valuation report notes that access to the subject site “is blocked in times of extreme flooding”.[23] Access from the Mt Lindsay Highway is via Wearing Road. The mushroom farm is on the corner of the highway and Wearing Road. The report notes that the mushroom farm ‘has recently closed’ – however, it was still operating at October 2018. In relation to overlays affecting the subject site, the report records Logan City Council Overlays: “Flooding and inundation Area … 84.6% affected”.[24]
- [32]Mr Fitzgerald says he “assessed the extent of flood free land to be about 1.1 ha or 85% flood affected”.[25] Further he said:
“I have relied on Logan City Council flood mapping as at the date of valuation to assess the extent of flooding on the subject site and comparable sales, as this is the material that the notional prudent purchaser and vendor would consider in determining the price for the hypothetical sale of the subject in accordance with the Land Valuation Act 2010.”[26]
- [33]The comparable sales advanced by the respondent are discussed later in these reasons. As the appellants’ material was not filed before replies were due, the respondent had not addressed the content nor comparable sales advanced by the appellant prior to the hearing.
Objections to material
- [34]At the hearing the respondent raised objection to some of the material contained in the appellants’ 14 September 2020 affidavit.
- [35]The first objection concerned information contained in paragraphs 6 and 7 of the affidavit, which the respondent says was provided at a without prejudice preliminary conference. Mr Copley says that the material referred to in fact arose from an exchange prior to the commencement of the preliminary conference and was not therefore subject to any form of privilege. He may be correct. However, in my view I do not consider the material to be relevant in any case and for that reason do not admit it.
- [36]The remaining objections to the 14 September 2020 affidavit concern what the respondent describes as the introduction of new material not raised in the ground of objection. Specifically, all the material submitted by the appellants regarding three comparable sales. The three sales detailed in the 14 September 2020 affidavit are included in the 31 July 2020 material filed by the appellant pursuant to the orders dated 26 June 2020. Two of the sales are also referenced in the Notice of Appeal. The appellants are of the view a correct valuation for the subject site is $300,000 and that the respondent’s valuation is excessive as demonstrated by comparable sales.
- [37]The relevant ground of appeal, although not stated explicitly in these terms, is that the valuation is in error because it is excessive. Comparable sales are the evidence presented to support the ground of appeal. The appellant was required to file and serve statements of evidence and documents to be relied upon by 4 pm on 30 July 2020. As noted at [23] of these reasons, the 7 September 2020 and 14 September 2020 affidavits provide context and substance to both the grounds of appeal and the 31 July 2020 correspondence. Although noncompliant with the orders of 26 June 2020, the affidavits did meet the time requirement of rule 24J, and no general objection was taken to their acceptance.
- [38]Accordingly, in my view it is valid for the appellant to adduce evidence of comparable sales. The relevance of the ‘comparable sales’ advanced by the appellant in the 14 September 2020 affidavit is discussed at [75] to [95] below.
- [39]As mentioned at [27], the respondent also took objection pursuant to rule 24J to the affidavit the appellant sought to introduce at the hearing. The respondent said that the affidavit introduced yet another comparable sale, which had not been provided ahead of the hearing which denied the respondent the opportunity to adequately respond. The introduction of new material at the commencement of a hearing is generally unacceptable. Mr Copley argued that I should exercise my discretion under rule 6 of the Land Court Rules 2000 to waive compliance with rule 24J on the basis that it would be an injustice not to do so. I did not accept the affidavit into evidence.
Previous consideration by the court
- [40]Included in the appellants' material is the valuation appeal decision of Land Court President JJ Trickett in Copley v Chief Executive, Department of Lands [1996] QLC 69 , dated 31 May 1996.[27] The appellants in that matter were Mr and Mrs Copley and the subject site was 23 Arthur Road, North MacLean.
- [41]In 2007 an appeal by Mr Copley against the 1 October 2004 valuation of the subject site came before the Land Court and was decided by Member RS Jones in Copley v Department of Natural Resources and Mines [2007] QLC 110.[28] This decision was tendered at the hearing by the respondent.
- [42]Since the making of those earlier decisions the following changes have occurred: the Logan City Council mapping now measures the probability of flooding in a 1:100 year event, rather than a single event such as the 1974 flood; there was a significant flood in 2017; and, a second mushroom farm was established adjacent to the first mushroom farm. There was no information to inform me if, since the making of those decisions, there had been any upgrading of access roads, flood mitigation works, or flood exacerbation impacts which might be relevant.
Flooding
Trickett decision
- [43]In the Trickett decision it is apparent that based on the evidence presented, the respondent’s valuer accepted that in relation to the subject site “…more like 75% of the land would be flooded in a “normal flood”’ and a ‘small area of less than 1 ha on the Arthur Road frontage was not inundated in the 1974 flood”.[29]
- [44]President Trickett said:
“Mr Copley said that he and his wife purchased the subject land in late 1978. Their major concern was that they had enough land above flood level upon which to build a house. From his experience in the area during the 1974 flood, Mr Copley knew that there was over ½ ha of dry land on the property …. (and) the house was constructed on the small area not subject to flooding.”[30]
- [45]It is clear from the decision that Mr Copley presented, and President Trickett viewed, video evidence of the 1974 flood in the subject area when most of Arthur Road was under water. President Trickett noted a second video showed the height of water at MacLean: “which, Mr Copley said, showed that the flood was 2 metres higher than indicated by Council measurements”.
- [46]The ‘flood impact’ ground of appeal considered by President Trickett was expressed in the decision as follows:
“(it) is in relation to the area of flooded country on the subject land, that it cannot be subdivided and that it produces no income”.[31]
- [47]He said that as the respondent’s valuer agreed that the subject lands was somewhat more inundated than he originally thought, the appellants had proved that part of their ground of appeal. He noted the other two elements, subdivisional potential and productivity, were not in dispute. President Trickett made no findings concerning the accuracy of Council flood information. It appears not to have been relevant to his consideration of the appeal.
Jones decision
- [48]The relevant ground of appeal was expressed by Member Jones at [6] as “the extent of flooding over the land and the approximate discount to take into account that flooding”.[32] At paragraphs [8] to [12] Member Jones describes the issue and the evidence then before him, and expresses his conclusion concerning the extent of flooding relevant to the task of valuing the land. Although Member Jones does not refer to video evidence, the material before him was likely to be similar to the material now before the court. The relevant paragraphs are as follows:
“[8] When valuing the land, based on inquiries he made of the Beaudesert Shire Council, Mr FitzGerald proceeded on the basis that in the 1974 flood water levels reached about 25 metres State Datum (RL25). Based on a RL of 25 metres Mr FitzGerald estimated that approximately 3,600 m² of land near Arthur Road would be above 1974 flood levels. As it turned out the council's designated flood level for the land was 24.5 metres however, not much seems to turn on this difference. On the other hand, the evidence of Mr Copley was that the 1974 flood reached a level of about 27 metres and that accordingly only some 750 m² of land would be above that level. Mr FitzGerald estimated that if the 1974 flood did reach RL27 then there would be about 1,000 m² of such land.
[9] The importance of this debate is significant. The evidence is, as I understand it, that residential development (and no doubt many other forms of development) would not be permitted or would only be permitted by the Council below 1974 flood levels with quite stringent and expensive conditions. In this context Mr Copley also said that the extent of the flooding over the land prevented it being subdivided and otherwise used for income producing purposes. However, it is tolerably clear that Mr FitzGerald valued the land on the basis of it having no subdivision or other income producing potential.
[10] In support of his contention that the 1974 flood reached RL27 on the land Mr Copley relied on his observations and oral and written statements of others. The authors of the various admissible statements and documents relied on by Mr Copley were not called.
[11] In hopefully what is a fair summary of the more important facts and matters relied on by Mr Copley, he in particular relied on observations and reports concerned with the effect of the 1974 floods on various creeks including Thompson Creek and Norris Creek; statements, observations and recordings of the levels of the flood at Macleans Bridge including meteorological observations and reports prepared by surveyors and observations concerning 1974 flood levels reached on what Mr Copley described as "the white Spanish house" located at the end of Arthur Road and at another nearby location called the "Round House Shop". Mr Copley also referred to finding river sand which he said would have been left over from the 1974 flood in a concrete slab located where part of the present main residence is now situated.” (citations omitted)
- [49]At paragraph [12] Member Jones said this:
“Notwithstanding the wide ranging nature of the evidence relied on by Mr Copley, at the end of the day I was not convinced that either separately or as a whole that evidence proved that the appropriate designated flood level for the land should be RL27. It is my opinion that the knowledgeable and prudent vendor and purchaser prescribed in Spencer v The Commonwealth would proceed, as did Mr Fitzgerald, on an acceptance of the advice provided by the Council.”[33] (citations omitted)
Odour
Trickett decision
- [50]The issue was described by President Trickett as:
“… the effect upon the unimproved value of the subject land of the smell from the mushroom farm which had been established by Queensland Mushrooms on land situated about 1km to the north-west. Apparently the smell comes from fowl manure and other material used in the process of growing mushrooms. Mr Copley said that the smell affects the subject land when the wind is from the north-west. He produced letters from the owners of neighbouring lands to support his evidence”.[34]
- [51]In that case President Trickett considered the evidence of the respondent’s valuer that ‘the effect on the unimproved value of the smell’ would have been taken into account in the previous valuation was without evidence however while accepting that there was a smell from the mushroom farm, he concluded that there was ‘no evidence of just what depreciating effect it would have on the unimproved value of the subject land’.
Jones decision
- [52]In the Jones decision the evidence of Mr Copley was accepted that “the odours are regularly blown over by winds from a westerly direction and tended to be worst from late afternoon into the early evening.”[35] While the respondent’s valuer asserted that the problem was common to all the sales relied on, Member Jones said he preferred the evidence of Mr Copley regarding the prevailing conditions which would mean three of the respondent’s sales would not be as seriously affected. Ultimately Member Jones, having considered the evidence of the respondent’s valuer that ‘he had not been able to prove in any quantitative way just how these odours would affect value’, and expressing some sympathy for Mr Copley on the issues, concluded on the evidence before him that he was not able to make any reduction in value because of it.
Transmission lines
- [53]As noted earlier, the effect of transmission lines was raised as a ground of appeal, and the continued existence of the transmission lines subject to what Mr Copley referred to as a ‘way leave’ (or ‘wave leave’ as it is referenced in evidence) was confirmed by Mr Copley at the hearing. It was also clarified that the subject site was not burdened by an easement.
- [54]It appears that the impact of transmission lines was not a ground of appeal before President Trickett as there is no mention of it in his decision, however the impact was the basis for ground 10 of the appeal before Member Jones where the issue was described as follows:
“The power lines are, according to Mr Copley, owned by Energex and carry some 11,000 volts and the poles supporting the power lines are in a very poor and dangerous condition. The lines are not protected by an easement but by what was referred to as a “way leave” and are located about 100 metres east of the residence nearest Arthur Road close to existing structures which I understand includes sheds and a “granny flat”. According to Mr Copley the existence of these power lines poses a threat not only to he and his wife but also to livestock.”[36]
- [55]In considering the respondent’s valuer evidence Member Jones noted that the valuer “conceded that a discount of ‘a few percent’, maybe up to 5% might be justified”.[37] Member Jones concluded having regard to the evidence that some adjustment was necessary and applied a discount of 5%. He expressed no view regarding the safety of the power lines.
Consideration of main issues raised in grounds of appeal
- [56]In evidence Mr Copley provided a video recording of footage taken in the area of the subject site in the days after the 1974 flood.[38] Mr Copley said that at the time he lived at Albion but had horses on agistment at a property in Arthur Road. Mr Copley was not present when the filming occurred but was in the area in the days after the flood. He did not own the subject site at the time. He purchased the land in 1978 and later built the house he now occupies. In evidence Mr Copley said at one point that the subject site would suffer 100 percent inundation in a flood of the magnitude of 1974,[39] and in cross examination said, “It well may have totally flooded and it may not have totally flooded”.[40] He did maintain though that he is (now) of the view that the subject site would suffer greater inundation than he considered at the time of the previous appeals. Mr Copley said in evidence that he believes that if a flood of the same magnitude as the 1974 flood were to occur, only a long narrow area of land adjacent to Arthur Road, not suitable for residential occupation, perhaps a few hundred square metres,[41] would be above the flood line.[42]
- [57]This view is in fact consistent with and was accepted by the respondent’s valuer when the matter was before President Trickett, discussed at [47] above.
- [58]The evidence included photographs of debris on Arthur Road taken in 1974.[43] Mr Copley suggested that for waters to have deposited debris at that point, the flood level had to be higher than that recorded by the Logan City Council. When this was put to Mr Fitzgerald, he was unable to confirm that that must be the necessary conclusion.
- [59]The photographs are faded and grainy and they appear to be taken low to the ground. While it is certainly possible and perhaps probable that the conclusion asserted by Mr Copley is what the photographs disclose, there could be other explanations. Evidence of this kind would usually be given by the person who took the photograph who can swear to its authenticity in terms of what it appears to illustrate. The best photographic evidence includes (in the frame) something to record scale and size (tape measure, survey instruments) and date and time, so as to discount any risk of ‘optical illusion’ and to deny any other explanation.
- [60]When the matter was put to him by Mr Copley, Mr Fitzgerald was unable to confirm that the photograph demonstrated error in flood modelling. In any case, it is not the position of the respondent that the flood modelling precisely records the peak level of all recorded flood events. The respondent’s position is that, consistent with the test in Spencer v the Commonwealth,[44] the prudent purchaser would have recourse to the Logan City Council flood modelling when considering the purchase of property in flood prone areas, and that would factor into the value attributed to such a property by a prudent purchaser. I note that Mr Copley, while accepting the applicability of the Spencer test, and that a prudent purchaser would carry out due diligence, was firm in his view that a prudent purchaser “would be very unwise” to rely on Council flood modelling.[45]
- [61]Ground 5 presents an issue perhaps not previously considered. That is, whether at 1 October 2018 local government regulations would not allow construction on the subject site (at all) as ‘all weather access’ is not enjoyed. Mr Copley’s argument appears to be that while actual structures on site are excluded from the valuer’s consideration, the fact that the site could not be used for residential purposes would potentially have an impact on a prudent purchaser.
- [62]As noted at [31] above, the respondent’s valuation report notes that access to the subject site is “blocked in times of extreme flooding”.[46] On that basis access is certainly denied in extreme conditions. When questioned about this Mr Copley was unable to point to a particular regulation concerning all weather access. Mr Fitzgerald said he was not aware of a Logan City Council regulation to that effect.
- [63]In written closing submissions the appellant says the value of the property is reduced as any future building permits would be affected by Councils “Flood Hazard Overlay Code” and may result in a denial of a building permit and or costly restrictions. This was not addressed in the respondent’s reply written submissions.
- [64]The appellant’s submission does not address the application of the Code to issues of access and egress. The Court is not an inquisitorial body but must act on the evidence before it.
- [65]I am of the view that section 22 of the Land Valuation Act 2010 would apply such that the subject site is valued on the basis that lawful use of the subject site continues to be a lawful use notwithstanding, for example, a change to a planning scheme which might render a current use non-conforming or the introduction and application of a Code which might apply some requirements on assessable development in the future. There are numerous cases to support this proposition and operation of section 22.[47] Information concerning the Logan Planning Scheme, property specific flood level reports and the content and requirement of applicable codes is all information accessible to a prudent purchaser.
- [66]In relation to the impact of odour from the mushroom farm, I note the conclusions of President Trickett and Member Jones.
- [67]Since those decisions however a second mushroom farm was developed. The second farm could be seen in flood maps tendered by the respondent.[48] The valuation report says that more recently the mushroom farm has ceased operation. However, it would appear that at the date of valuation it was operational. It is reasonable to accept that a second mushroom farm compounds the effect of the first mushroom farm and that in prevailing conditions the subject site experienced adverse effects from odours coming from the mushroom farm/s – and, that is something that might be relevant to value. As noted by President Trickett and Member Jones, while accepting impact, there was no evidence before them of the depreciating effect it would have on the value of the subject site.
- [68]In evidence concerning the odour from the mushroom farm Mr Fitzgerald said he didn’t notice an odour when he visited the site adjacent to the mushroom farm and at all times he visited the property he hadn’t noticed any smell.[49] On that basis Mr Fitzgerald’s evidence is that there would be no valuation impact on the subject site. In the circumstances I accept that at the relevant time, in certain conditions the subject site would experience unpleasant odours coming from the mushroom farm. However, I am unable to determine the impact it would have on the valuation of the subject site.
- [69]Although raised in the material there was no evidence led concerning the devaluing effect of the approval by Council of ‘Noxious Industrial Use extension to the immediate west of the subject site’.[50]
- [70]Finally, I note that the initial valuation was reduced after consideration of comparable sales evidence and the effect of flooding and power lines on the subject land. The respondent did not apportion the reduction for those impacts.
Conclusion – main issues raised in appeal
- [71]In amending the issued valuation the respondent says it didn’t factor in sufficiently flood and transmission line issues. The valuation was reduced by approximately 25% for a 10% increase in flood impact (from 75% to 85%). The difference in not insubstantial. I accept that only an irregularly shaped area of less than a hectare of land adjacent to Arthur Road would not be subject to inundation. I am therefore of the view that the area of the subject site subject to inundation would be slightly greater than 85% (as 85% of 7.275 ha would leave 1.1 ha outside the inundation area). My best estimate is an area approximating 90%. Adopting the reasoning Mr FitzGerald gave for the reduction in the valuation made on objection, the valuation the subject of this appeal is greater than it should be and is in error.
- [72]The impacts of odour from the mushroom farms do not lead me to conclude that the valuation is in error. I am satisfied that the impact of the transmission lines has been sufficiently taken in to account in the valuation. I am of the view that the subject site has been valued on the basis that lawful use of the subject site continues to be a lawful use notwithstanding any impact the Flood Hazard Overlay Code might have on any future development proposal.
Relativity
- [73]Mr Copley raises relativity in his materials[51] and annexes a decision of Member Scott in Ladewig v Department of Natural Resources, Mines and Water [2007] QLC 47,[52] which provides that the task of the Court is to determine the value of the land the subject of the appeal and if all other statutory valuations in the area are wrong or inconsistent with each other that cannot logically assist in determining the value of the subject property.[53] Annexure F is a list of properties in Arthur Road and Wearing Road and their ‘current site valuation’ and ‘new site valuation’.[54]
- [74]The Court has commented that whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence.[55] Accordingly, I will consider comparable sales evidence.
Comparable sales
- [75]The appellant provided evidence in relation to three properties: 37-43 Meadow Road, Jimboomba; 41-59 Arthur Road, North MacLean; and 38-54 Wearing Road, North MacLean.
Appellant sale 1 – 37-43 Meadow Road, Jimboomba
- [76]This property is said to be 10 acres (a little over 4 hectares). Mr Copley provided an advertisement for sale of the property which includes an aerial photo of it and adjoining lots.[56] The advertisement is dated 22 January 2020 and the advertised price is $250,000.
- [77]Mr Copley points to three aspects of comparability:
- He says: ‘Like the Subject Site the land is totally flooded’;[57]
- There is a ‘way leave’ agreement with Energex for high powered lines which cross the property;[58] and
- The property is serviced by a single 3.3 metre wide road.[59]
- [78]Apart from these aspects, no information is given regarding points of comparison between this property and the subject site.
- [79]The respondent argues that as there is in fact no sale of the property identified and that this is not a comparable sale that can be considered for the purposes of determining the valuation of the subject site.
Appellant sale 2 – 41-49 Arthur Road, North MacLean
- [80]
- [81]That statement seems at odds with Mr Copley’s earlier description of the extent of flooding at the subject site at 11(a) of his 14 September 2020 affidavit.
- [82]Mr Copley annexes two photographs which are said to show an ‘inundated corner of Arthur Road and Wearing Road’. The description alongside those photographs indicate they are relevant to the ‘all weather access’ ground of appeal. The caption says:
“Photos 1 and 2: Show the fully inundated Corner of Arthur Road and Wearing Road about 50 meters to the North of the entrance of the Subject Site and about 50 Metres South of SALE 2.” [62]
- [83]This suggests that if access from the north is cut by flood water then there is no vehicular ingress or egress to the properties on the southern side of that intersection – including the subject site. Sale 2 is said to be 50 metres to the north of the intersection and would also be denied ingress and egress when the intersection is flooded.
- [84]In evidence Mr Fitzgerald said that this was a mortgagee in possession sale and for that reason was of no value to the exercise of assessing the valuation of the subject site. He said that it was not applicable in considering the Spencer test. When asked to comment on Mr Copley’s sales evidence in relation to 41-59 Arthur Road, Mr FitzGerald said: “Arthur Road, that sale was a mortgagee in possession sale, so again it’s unable to be used.”[63]
- [85]As noted at [31] of these reasons, the respondent accepts that access to the subject site is ‘blocked in times of extreme flooding’ but have not separately apportioned a reduction in value for this impact, or addressed the impact the Flood Hazard Overlay Code might have on any future residential building application on the subject site.
- [86]Apart from the impact of flooding, flood access, and the location, there is no information provided regarding the comparability of this property to the subject site.
Appellant sale 3 – 38–54 Wearing Road, North MacLean
- [87]The second photograph at Annexure K to Mr Copley’s 14 September 2020 affidavit and paragraph [21] of the affidavit suggest that sale 3 is land which accommodates five igloo structures and one standard shed. Mr Copley says:
“Sale 3 was purchased by Agreement on 04/04/16 together with the property next door for the sum of $780,000 with a combined land area of 9.459 ha and the owners built the structures shown in Photo 2 and a Residence on the adjoining block …”[64]
- [88]There was much discussion at the hearing about this property and the neighbouring site at 56–68 Wearing Road.
- [89]Mr Copley provided a copy of Queensland Valuation and Sales (QVAS) data for 38–68 Wearing Road (9.459 ha) showing a sale price at 4 April 2016 of $780,000 and a 1 October 2014 valuation of $350,000.[65]
- [90]It appears that the QVAS data print out supplied by Mr Copley suggests an amalgamation of the two sites at 38–54 Wearing Road and 56–68 Wearing Road, however, in evidence Mr Fitzgerald was firmly of the view that the ownership of the adjacent properties were not associated or related.
- [91]The property at 56–68 Wearing Road is the respondent’s second comparable sale and is discussed later in these reasons. The situation was clarified in further written submissions from the respondent dated 27 October 2020. Sale 3, the site at 38–54 Wearing Road, is adjacent to the mushroom farm owned by Mr Tang, proprietor of Kenon Group Pty Ltd. The site at 56–68 Wearing Road was sold by Kenon Group Pty Ltd as Trustee to Qian Liu on 4 October 2017. That site is currently leased out for residential purposes. The QVAS data report provided by the respondent states the value of 56–68 Wearing Road at 1 October 2016 was $330,000 and contains the following entry:
“Vendor/Purchaser Advise a Relationship or Association: NO”[66]
- [92]The point Mr Copley appears to be making is that, perhaps despite the difference in valuation and sale dates, while the valuations might appear comparable to the subject site, they are:
“simply not comparable, particularly when one is a profit making Mushroom Growing Commercial/Industrial use … and the Appellants land is a totally flooded Residential, with substantial land Restrictions as evidenced in Mr Fitzgerald’s material …”[67]
- [93]The respondent simply takes the view that despite the sale price being similar to the subject site valuation, the sale is not comparable as it was purchased for industrial use. That is the point Mr Copley is making. He is presenting a sale to establish why the valuation of the subject site is excessive.
- [94]Mr Copley questioned Mr Fitzgerald about the difference in standard of road access to 38–54 Wearing Road, North MacLean as opposed to the narrow bitumen strip road servicing the subject site. In evidence Mr Fitzgerald accepted that whereas he referred earlier to Arthur Road as dual carriage, it was a narrow strip, although he thought cars would be able to pass without moving to the verge. When challenged on this Mr Fitzgerald said that whether the access road was truly ‘dual’ or of the dimensions of Arthur Road “he didn’t accept it made much difference”[68] and he “believed (it was) taken into account in the valuations”.[69]
- [95]The respondent says issues concerning the quality of access was not raised as a ground of appeal and cannot therefore be considered. In my view the ground of appeal is that the valuation is excessive.[70] The appellant particularises the ground of appeal in asserting that a reason it is excessive is because the quality of access is elevated in the valuation. The quality of access is featured in all the respondent’s comparable sale in Mr Fitzgerald’s report. This suggests that it might have some relevance beyond being merely descriptive. The evidence is however that its impact on the valuation is marginal.
Respondent sale 1 – 23-25 Equine Place, South MacLean
- [96]This property is 9,127 m2 (0.9127 hectares), zoned rural residential, and sold on 7 August 2017 for $328,000. This was also the analysed site value. The site value as at 1 October 2018 was $305,000.
- [97]The property is described by Mr Fitzgerald as: being regularly shaped; having dual lane bitumen access; being at the end of a cul-de-sac; and having underground power and water. He notes that the property is approximately 500 metres east of the Mt Lindsay Highway; is approximately 1.6 km from the subject site; has better services but is closer to the highway and may have greater traffic noise; is flood affected, but not to the same extent as the subject site; and is also much smaller in size. The respondent considers this sale inferior.
- [98]The appellant says this sale is in a new Residential Low density estate with wide bitumen sealed road access.
- [99]When questioned, Mr Fitzgerald agreed that this comparable sale was in an ‘up market’ estate as compared to the subject site.[71]
Respondent sale 2 – 56-68 Wearing Road, North MacLean
- [100]This property is adjacent to appellant’s sale 3, as discussed above at [91]. It comprises an area of 4.7 hectares, sits approximately 500 metres west of the subject site and is zoned Rural Residential – Cottage rural precinct. It was sold on 12 September 2017 for $400,000. The applied value at 1 October 2018 is $370,000.
- [101]The property is of a regular shape; has no town water; is approximately 500 metres east of the Mt Lindsay Highway; is flood affected at the rear (46.8% according to Council overlays); was purchased privately, and is located next to the mushroom farm.
- [102]The respondent summarises this sale as follows: it is in close proximity to the subject site; is flood affected but still enables full utility as a rural residential home site; is generally more level and has a greater percentage of flood free land to the subject site; is closer to the highway than the subject site; and is next door to the mushroom farm. Overall this sale is considered by the respondent to be similar or comparable.
- [103]As discussed at [90] – [92] above, the appellant suggests a relationship between vendor and purchaser in this sale which might see rezoning in the future and an amalgamation of lots to the benefit of the parties.[72] Mr Copley also questioned the comparability of a sale which he believes to achieve amalgamation for an enterprise ‘which has no such economic comparison’ to the subject site.
- [104]In the hearing this was put to Mr Fitzgerald. He expressed the view that the sale was not an amalgamation and he was unaware of any relationship between vendor and purchaser. Mr Fitzgerald also commented on the impact of the neighbouring mushroom farm on this site. He said he had visited the site a number of times and had not noticed any unpleasant odour despite its proximity to the mushroom farm.
Respondent sale 3 – 70 Vista Road, South MacLean
- [105]This property is 3.575 hectares, zoned Rural Residential – Cottage Rural Precinct, and was sold 16 October 2018 for $390,000 with an analysed site value of $370,000, taking account of a shed and dam. The site value at 1 October 2018 was assessed to be $360,000.
- [106]The property is an elongated shaped block with dual bitumen access and is connected to power but not town water. It sits approximately 900 m east of the Mt Lindsay Highway and 2.4 km radially south west of the subject site. Council overlays indicate a flooding and inundation area of 97.1%. There is only a small area higher than the flood level.
- [107]The respondent summarises this sale as follows: it has slightly greater flood inundation than the subject site and is similar in that both properties have Logan River frontage. Overall the respondent considers this sale slightly inferior to the subject site.
- [108]The appellants say this sale is in a ‘much sought after and expensive area of North MacLean which has a high quality of Rural Residential homes built in this Residential Estate’ serviced by dual lane bitumen sealed road – “with no threat of Commercial/Industrial Use”.[73]
- [109]Mr Copley says the sale property has a lesser frontage to the Logan River, would have reduced ‘debris clean up’ costs, has a considerable area for dwelling construction, and enjoys extensive parkland in an area well maintained by Council.
- [110]When asked whether this property could be considered to be in a more ‘upmarket’ location Mr Fitzgerald agreed that is was in a slightly more upmarket area.[74] He said that although there might be greater risk of inundation on the subject site, it was a larger land holding which could be enjoyed for rural residential purposes.
Conclusion
- [111]The Court must decide on the totality of the evidence whether the decision on objection is in error. At [71] of these reasons I determined that the area of the subject site not subject to inundation was miscalculated which resulted in error in the valuation.
- [112]As directed by s 170(b) of the LVA, I must proceed to change the valuation so that it is correct. To do so I must look to the evidence to find the correct value.
- [113]While I am not satisfied that the comparable sales advanced by either the appellant or respondent were ideal when considering the subject site, the best of them are respondent sales 1 and 3.
- [114]I am unable to make any findings or conclusions concerning the flood modelling adopted by the Logan City Council in 2016. It is what it is. It is not mapping of the 1974 flood. It is an important resource for persons dealing in land. It no doubt has an impact on decisions made to buy and sell, on decisions to develop and invest, and on the decisions of others such as insurers. The way it has been described in this matter is as a tool for assessing risk rather than removing risk. In that regard, there are likely to be locations where the information is wrong, either because the actual impact at the location in a 1:100-year flood is in fact greater or the impact is lesser than the modelling suggests. When it is in error it might be because of mitigation factors occurring elsewhere, or errors of judgment in the management of flows in extreme events, or because of broader environmental impacts.
- [115]Based on the evidence before me I determine the valuation of the subject site ought to be discounted by a further 5% to take account of the reduced area I consider above the inundation line. Rounded down, that would see a valuation of $350,000.
Orders
- Appeal LVA 675-19 is allowed.
- The valuation as at 1 October 2018 of Lot 31 on RP 106105 having an area of 7.375 hectares and located at 23 Arthur Road, North MacLean is Three Hundred and Fifty Thousand Dollars ($350,000).
- Any submission as to costs must be filed and served within 14 days of the publication of these reasons.
Footnotes
[1]Orders of Judicial Registrar GJ Smith dated 26 June 2020.
[2]Lot 31 on RP 106105.
[3]Expert Report of D Fitzgerald filed by the respondent on 30 July 2020 para 1.9.
[4]Respondent’s Statement of Evidence – Valuation filed by the respondent on 28 August 2020 page 3 para 1.
[5]T 1-54, line 19.
[6]T 1-70, lines 30 to 32.
T 1-56, lines 37 to 39.
[7]Annexure A to Form 3 Notice of appeal Against the Valuer-General’s Decision on Objection filed by the appellants on 3 September 2020.
[8]Annexure A to Form 3 Notice of appeal Against the Valuer-General’s Decision on Objection filed by the appellants on 3 September 2020 para 7(b).
[9]Ibid, para 6(c).
[10]Ibid, para 8.
[11]Ibid.
[12]Order 1(a) of Judicial Registrar GJ Smith dated 26 June 2020.
[13]At a review hearing before Member WA Isdale on 11 September 2020 Mr Copley was informed that the Court did not have equipment to view a VHS recording.
[14]Expert Report of D Fitzgerald filed by the respondent on 30 July 2020.
[15]Respondents Statement of Evidence – Valuation filed by the respondent on 28 August 2020.
[16]Ex 2.
[17]Ex 1.
[18]Ex 2, para 4.
[19]Expert Report of D Fitzgerald filed by the respondent on 30 July 2020.
[20]Ibid, para 3.1.
[21]Respondent’s Statement of Evidence – Valuation filed by the respondent on 28 August 2020, Annexure B.
[22]Ibid.
[23]Expert Report of D Fitzgerald filed by the respondent on 30 July 2020, para 3.3.
[24]Ibid, para 3.6
[25]Respondent’s Statement of Evidence in Reply filed by the respondent on 28 August 2020.
[26]Ibid, page 2.
[27]Ex 1, Annexure L.
[28]Ex 6.
[29]Ex 1, Annexure L, page 2.
[30]Ex 1, Annexure L, page 3.
[31]Copley v Chief Executive, Department of Lands [1996] QLC 69, 6.
[32]Copley v Department of Natural Resources and Mines [2007] QLC 110 [6].
[33]Ex 6, para 12.
[34]Ex 1, Annexure L, page 3.
[35]Ex 6, para 23.
[36]Ex 6, para 28.
[37]Ex 6, para 29.
[38]Ex 10.
[39]T 1-26, line 22.
[40]T 1-51, line 12.
[41]T 1-51, lines 27 to 28.
[42]T 1-51, lines 5 to 8.
[43]Ex 9.
[44](1907) 5 CLR 418.
[45]T 1-32, line 29.
[46]Expert Report of D Fitzgerald filed by the respondent on 30 July 2020, para 3.3.
[47]See Chief Executive, Department of Main Roads v Body Corporate for Golden Sands Community Title [2000] QLAC 81.
[48]Ex 4.
[49]T 1-70, lines 38 to 39.
[50]T 1-53, lines 5 to 6.
[51]Ex 2, para 5–10.
[52]Ex 2, Annexure D.
[53]Ex 2, Annexure D, para 7.
[54]Ex 2 Annexure F.
[55]WM and TJ Fischer v The Valuer General (1983) 9 QLCR 44, 46.
[56]Ex 2, Annexure G.
[57]Ex 2, para 11(a).
[58]Ex 2, para 11(b).
[59]Ex 2, para 11(c).
[60]Ex 2, para 13.
[61]Ex 2, para 14.
[62]Ex 2, Annexure I.
[63]T 1-55, lines 24 to 25.
[64]Ex 2, para 23.
[65]Ex 2, Annexure M.
[66]Ibid.
[67]Ex 2, para 24.
[68]T 1-59, lines 39 to 40.
[69]T 1-59, line 42 to 43.
[70]Reply Submissions filed by the respondent on 6 November 2020, para 7.
[71]T 1-71, line 37.
[72]Ex 2, para 41–46.
[73]Ex 2, para 47–50.
[74]T 1-72, line 7.