In brief
The case of
Farrah v Brisbane City Council [2016] QPEC 19 concerned an appeal in the Planning and Environment Court commenced by Mr Jeffrey Farrah against the Brisbane City Council's refusal to grant a preliminary approval to carry out building works, particularly its refusal to allow the demolition of two pre-1911 houses.
The council's grounds for refusal included asserted conflicts with a number of desired environmental outcomes and performance criteria and acceptable solutions under the Demolition Code of the
Brisbane City Plan 2000. It was accepted by both parties that the fundamental issue for determination by the Court was "whether or not the two houses were reasonably capable of being made structurally sound".
The Court accepted that the cost to bring each house to a structurally sound state would be in the order of $96,000 and $136,000 respectively and found that neither house was reasonably capable of being made structurally sound. The appeal was therefore allowed.
Court found that structurally sound would include making the structure waterproof and safe but not necessarily fit for permanent habitation
The Court considered the principles in
Gould v Brisbane City Council [2001] QPELR 77,
Craig Securities (No. 2) Pty Ltd v Brisbane City Council [2006] QPELR 601 and
Ken Ryan & Associates Pty Ltd v Brisbane City Council & Ors [2008] QPELR 147 in determining whether the two pre-1911 houses were "structurally unsound and not capable of being made structurally sound".
Whilst all three decisions confirmed the test was an objective one, the Court noted a difference between the reasoning of Griffin SC DCJ in
Craig Securities and that of Wilson SC DCJ in
Ken Ryan on whether a building was required to be restored to a level suitable for safe occupation in order to be structurally sound.
In
Craig Securities, Griffin SC DCJ considered "that the relevant tests did not require that the standard of structural soundness meet present day building codes and/or standards". On the other hand, the Court observed that Wilson SC DCJ in
Ken Ryan appeared to suggest that "the test required the structure be made habitable".
Nonetheless, the Court accepted the test articulated by Griffin SC DCJ in
Craig Securities and found that structurally sound would include making the structure waterproof and safe but it would not be necessary for the structure to be fit for permanent habitation.
Court accepted additional works identified by Mr Farrah's engineer were necessary to make both houses structurally sound
The Court then went on to consider the expert evidence relied on by both parties.
The parties' engineers agreed on most of the items needed to be repaired for both houses. However, the engineer for Mr Farrah identified several additional works in respect of both houses.
As to the additional works for the house at 8 Amersham Street, the Court found that the rectification to the rear door was necessary but that the works identified in respect of the window frames on the northern external wall of the house were not necessary to make the house structurally sound and waterproof.
As to the additional works for the house at 10 Amersham Street, the Court accepted that the chamfer boards on the northern external wall were required to be replaced, otherwise it would result in an "…unacceptable risk of water damage to the timber framing behind those walls" (At [26]). However, the Court was not satisfied that all the timber sills would need to be replaced to make the house structurally sound.
Court preferred the evidence of the council's expert in determining the cost of making the houses structurally sound but considered there to be a risk of variations to the cost occurring
In determining the costs of making the houses structurally sound, the Court considered the evidence of experts for both parties who submitted a cost estimate for making each house structurally sound.
The Court found the evidence of the expert for Mr Farrah confusing and also found irregularities in the expert's costings. The Court generally preferred the evidence of the council's expert but accepted that there were inherent uncertainties in the process of making the houses structurally sound which could lead to variations to the costings and as such it was appropriate to factor that risk into the evidence.
On that basis, the Court found that in order to make the houses structurally sound, a prudent owner would budget for in the range of $86,000 to $96,000 for the house at 8 Amersham Street and $126,000 to $140,000 for the house at 10 Amersham Street.
Court found the valuation evidence offered limited assistance in determining whether the houses were reasonably capable of being made structurally sound but led to the conclusion that a significant amount of money would be required to be spent
The Court also considered the evidence of the valuers for both parties who submitted an "as is" valuation of each of the lots and houses in their current state. However, both experts had different starting points and took different approaches in their assessment.
The valuer for Mr Farrah submitted that the making of both houses structurally sound and habitable would result in an added value of $180,000 to the "as is" valuation of both houses. The valuer for the council on the other hand, considered that the making of both houses structurally sound and habitable would result in the net worth of each property being indicative of market value and that the risk of over capitalisation was low.
The Court examined the sale price of several other properties in the area and considered that Mr Farrah's valuer had materially underestimated the "as is" value of both houses and therefore gave no weight to his assessment of the "as is" values. In regard to the evidence of the council's valuer, the Court found that whilst the valuer's "as is" valuations might be correct based on the three assumptions the valuer proceeded on, those assumptions were not warranted.
The Court ultimately concluded that the valuation evidence offered limited assistance in determining whether the houses were reasonably capable of being made structurally sound. However, the evidence did lead to the conclusion that Mr Farrah would be required to spend a significant amount of money.
Court found that neither house was reasonably capable of being made structurally sound given the significant costs involved
In light of the expert evidence, the Court concluded that the cost of making the houses structurally sound would involve a significant expenditure and that there was a risk that the expenditure would not be recovered if each of the houses was sold in the open market.
The Court also concluded that the houses were far from habitable and that a considerable amount of further expenditure would be required to bring them to a habitable state.
The Court found that it would be unreasonable to require a significant expenditure to be incurred in circumstances where there would be two uninhabitable houses which might be left to deteriorate again unless a further significant amount of money was spent to make them habitable.
On this basis, the court found that neither house was reasonably capable of being made structurally sound.