Bruschi v Minister for Lands

[1995] QLC 149

[1995] QLC 149

 

 

LAND COURT, BRISBANE

31 October 1995

Re:  Application for Conversion of Tenure

Special Lease No. 26/41742, Innisfail District Lessees:        Enrico and Gail E Bruschi

(Hearing at Innisfail)

D E C I S I O N

Mr. and Mrs. Bruschi are the lessees of Special Lease No. 26/41742, Innisfail District.  Under the provisions of Section

207 of the Land Act 1962, the lessees applied to the Minister for Lands for conversion of tenure of the Special Lease to fee simple. It is agreed that the relevant date is 3 March 1994. The Minister determined the unimproved value for the purposes of conversion of tenure at $50,000 and the lessees have requested that the matter of the unimproved value be referred to the Land Court for determination.

Special Lease No. 26/41742 is in respect of the land described as Lot 7 on Plan I 28161, Parish of Johnstone, County of Nares, containing an area of 1,012m². It is situated in Cassowary Street, Innisfail, approximately 1.5 kilometres west of the Innisfail commercial business district. Cassowary Street is a full width bitumen strip with concrete kerbing and channelling. It is low lying and subject to flooding on occasions preventing access to the subject land.

It is agreed that in its unimproved state the subject land was low lying and perhaps swampy in parts. It required extensive filling before structural improvements could be effected.  It is a regular shaped allotment with a frontage of

20.117 metres and a depth of 50.292 metres. It is zoned light industry under the Johnstone Shire Council town planning scheme and is used for light industrial purposes, as the site for a panel works.

Mr. and Mrs. Bruschi both gave evidence. They estimated that the unimproved value of the land for conversion purposes is $41,000, on the basis of the 1993 valuations applied by the Department of Lands for Local Government purposes ($37,500) and for rental purposes ($38,500). In addition, by applying an indexing factor of increases to former unimproved values which were worked out by their accountant, the unimproved value approximates $41,000.

They also point out that an unimproved value of $54,000 had been applied for rental purposes as at 1 July 1993. However, this was reduced to $38,500 following an objection where recognition was given to the extent of capital improvements to the land, principally clearing and

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filling, by various lessees since the commencement of the lease in 1978. The actual costs of some of these improvements had been obtained from the previous lessee, Mr. Romano, in addition to their own records.

The lessees also refer to the adjoining allotment to the south, recently freeholded by a Mr. Sorbello for $48,000, which they regard as similar except that the subject land has a sewerage/drainage manhole about eight metres from the rear boundary and two metres from the side boundary, which effectively reduces the usable area by about 20m². This land is unusable for building purposes as the council requires access to it at all times. They consider that the subject land therefore is less valuable than Mr. Sorbello's land.

Mr. Bruschi also tendered a list of sales in Cassowary Street. These were sales of allotments to the south of the subject land which, although zoned light industry, were used for single unit residential purposes. Lot 25, 12 Cassowary Street of 1,012m², sold in February 1990 for $37,000, resold in November 1992 for $45,000 and again resold in September 1994 for $87,600. The property is improved with a single unit dwelling. These sales give some indication of the increase in the value of such property over that period. Lot 21 of 1,568m² sold in July 1991 for $79,000 and Lot 27 of 1,012m² sold in March 1992 for $46,000. However, the houses on these lands are still occupied and it would seem that these lands were sold as residences rather than industrial land and in my view they do not indicate the value of light industrial lands.

Evidence for the Crown was given by Mr. SA Cross, a registered valuer employed by the Department of Lands. Mr. Cross valued the subject land by reference to sales of three allotments in Innisfail. Sale No. 1 is situated in Station Street, has the same area and zoning as the subject land, which it adjoins at the rear boundary to the west. Station Street is higher in elevation than Cassowary Street and is not subject to periodic flooding.  This allotment sold in February 1991 for

$150,000 improved with a structural improvement and filling. It analysed to show a value of $55,000 or $54 per square metre as a filled and levelled site.

Mr. Cross explained that the land had been extensively filled but not to the same extent as the subject land. In its natural state at its boundary with the subject land it was at the same level, but sloped up to the road level at the road frontage. Mr. Cross is of the opinion that in its filled state it is directly comparable to the subject land. However, he considered that the market had increased by 20 per cent between the date of sale in 1991 and the relevant date.

Sale No. 2 is situated in Ernest Street, about one kilometre east of the subject land, has an area of 1,012m² and is zoned commercial industry. It sold for $150,000 in August 1993. It is all sound land.

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The sale analysed to show an unimproved value of $149,000, or

$147 per square metre. Mr. Cross considered it to be considerably superior to the subject land because of its better location, access and zoning. It was initially considered to be high, Mr. Cross said, but later sales indicate that it was not out of line.

Sale No. 3 is situated in Edith Street, a major thoroughfare, about 150 metres north of the subject land. This allotment of 1,834m² is also zoned commercial industry. It sold in August 1994 for $190,000. It also is all sound land. This sale analysed to show $188,500 or $103 per square metre. Mr. Cross considered it to be far superior to the subject land because of its size, better location and higher zoning.

These latter two sales are zoned commercial industry, which Mr. Cross acknowledged to be superior to light industry zoning, but not greatly so. He referred to the "as of right" uses for both zonings, where such uses are similar, except that while "general stores" and "refreshment services" are permitted in the commercial industry zoning, they are excluded in the light industry zone.

However, be this as it may, it is clear from the evidence that both Ernest Street and Edith Street are part of the Bruce Highway and have much better exposure than the subject land,

being in fringe commercial areas. They are also sound land requiring no filling.           It is difficult therefore to see how they can provide a reliable basis for the subject land which is situated in a quiet back street and required extensive filling.

On the other hand, sale No. 1 while comparable, took place over three years prior to the relevant date and as filled land showed $54 per square metre.

In order to support his approach to the valuation, Mr. Cross presented sales of three allotments within the Callendar Park subdivision, all of which have council approval for duplex construction. They range in area from 815m² to 931m² and sold between December 1993 and March 1994 for $48,000 each, which he said is about $8,000 to $10,000 above the residential A levels of value. He considered that given the smaller area, lesser zoning and use options, and poorer location of the sales, he felt that a valuation of $65,000 on a filled and levelled basis was fair and reasonable for the subject land.

This may be of some consolation to Mr. Cross in the overall scheme of things, but it is difficult to see how these sales can be of any assistance in valuing the subject land.

Mr. Cross gave details of calculating the amount of fill in the subject land itself. From information he obtained from the Johnstone Shire Council's engineering records for the Innisfail sewerage scheme he ascertained spot contour levels of

2.5 metres RL at the front of the site

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and 2.4 metres RL at the rear. The special conditions of the special lease require that the land be filled to a reduced level of 3.5 metres at the front and 4 metres at the rear prior to any building works commencing. This equates to raising the level one metre at the front and 1.6 metres at the rear of the subject land or an average of 1.3 metres across the site. This itself equates to 1,315.6 metres of compacted fill. At $12 per cubic metre compacted the cost of fill at the relevant date was

$15,787.

From what sales evidence he had, Mr. Cross considered that the subject land, filled and levelled, had a value of $65 per square metre, or $65,780. From this he deducted the cost of filling of $15,787 to arrive at an unimproved value of $49,993 which he rounded off to $50,000.  I cannot fault Mr. Cross's

reasoning in this regard and the evidence adduced by Mr. and Mrs. Bruschi does not in any way refute it. However, I note that in his calculations he has not allowed for the cost of clearing the subject land.

In my view it could not be filled and levelled without clearing, so I will allow an extra $1,000 for clearing. In addition, I am of the opinion that the 20 square metres affected by the sewerage drainage manhole would influence a prudent purchaser to pay less for the subject land than for a comparable allotment which did not have such inconvenience.

Mr. Cross explained that the unimproved value ascertained for conversion purposes for Mr. Sorbello's adjoining allotment of $48,000, was made about the same relevant date as for this conversion. The difference between the $50,000 he applied to the subject land and the $48,000 he applied to Mr. Sorbello's land, results from his inquiries at the Johnstone Shire Council. They revealed that a possible 200 cubic metres of additional fill was required on the Sorbello property. It seems to me that this calculation was made on the basis that the allotments had a regular slope from front to rear. However, there is no evidence of spot levels to indicate what the level of fill was apart from the very front and the very rear of each allotment.

It therefore seems to me that the benefit of any doubt should be given to the Bruschis in this case. For the reasons that I have set out above I've come to the conclusion that a value of $48,000 is appropriate in these circumstances.

Accordingly, the unimproved value for the purposes of conversion of tenure of Special Lease No. 26/41742, Innisfail District, is determined at $48,000.

the Land Court

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