Absence of Valuation Evidence Proves Costly in Flood Mitigation Resumption

A recent decision of the Land Court highlights the importance of being properly advised in land resumption matters. Lim v Moreton Bay Regional Council [2019] QLC 2 concerned a claim for compensation by a landowner (Mr Lim) consequent upon the compulsory acquisition of part of his land by the Council pursuant to the Acquisition of Land Act 1967 (Qld) (‘the Act’). The land was resumed for ‘flood prevention or flood mitigation purposes’,[1] which involved the construction of a levee and associated drainage infrastructure on the property.[2]

Mr Lim did not engage lawyers to act on his behalf at the hearing of the claim, nor did he engage an independent expert valuation witness to provide evidence in support of his assertions about the value of the resumed land. As part of his case, Mr Lim argued that the resumed land possessed a number of unique characteristics, including:

• A rainforest which normally takes approximately 70 years to mature;
• A koala colony habitat due to the abundance of a particular type of gum tree favoured by koalas in the area; and
• A variety of flora, fauna and insects.

The valuation expert engaged by the Council, in his valuation, did not refute any of the characteristics advanced by Mr Lim; however, nor did he consider – at all – the sale of properties with the same characteristics in his comparative sales analysis. There was therefore a distinct gap in the evidence before the Court.

To that end, the Court noted:

‘It is shame that the applicant did not assist the Court by placing evidence from an independent expert valuer before the Court who may have assisted this Court with comparable sales that properly took into account the attributes of the resumed land in the context that I am currently considering’[3].            

….

‘When met by a case involving compensation under the [Act] where one side presents expert valuation evidence and the other side does not, the side that does not present independent expert valuation evidence is confronted by a very onerous task’.[4]

Ultimately, the Court was able to make a 15% adjustment to the valuation of the land in favour of Mr Lim having regard to evidence of voluntary sales to Council to help seal the evidentiary gap.[5] The Court found the value of the resumed land to be $255,670.00 (which was still substantially less than compensation claimed by Mr Lim, which was in excess of $800,000.00).

The Court acknowledged that it was not the proper function of the Court to ‘take a punt’ on the value of the resumed land and that it was required to ‘adopt a reasoned, transparent approach based on the factual evidence’ (at least insofar as that evidence was considered reliable).[6] It may have been the case that the Court could have attributed greater value to the unique characteristics of the property if there was some evidentiary basis to support the value asserted by Mr Lim. On that point the Court had this to say:

‘The Applicant has himself to blame for not providing the Court with independent expert opinion which could have assisted the Court in determining a value for the resumed land taking into account those components’.[7]

The decision serves as a timely reminder to those who may be affected by a land resumption to ensure that they are properly advised (both with respect to legal and valuation matters). This is particularly so in view of the fact that the Act provides a mechanism to recoup ‘legal costs and valuation or other professional fees reasonably incurred by the claimant in relation to the preparation and fling of the claimant’s claim for compensation’.[8]    

If you would like to know more about compulsory acquisitions of property please do not hesitate to contact Dan Morton or William McKenzie.

[1] [2019] QLC 2, [1].

[2] [2019] QLC 2, [5].

[3] [2019] QLC 2, [110].

[4] [2019] QLC 2, [113].

[5] [2019] QLC 2 , [142].

[6] [2019] QLC 2, [145].

[7] [2019] QLC 2, [152].

[8] Acquisition of Land Act 1967 (Qld) s 20(5)(a).