Cairns Shelfco No. 16 Pty Ltd v Chief Executive, Department of Natural Resources

Cairns Shelfco No. 16 Pty Ltd initiated appeals against the Chief Executive of the Department of Natural Resources regarding the unimproved valuations of a parcel of land located in Marlin Parade, Cairns. The land is leased by Shelfco from the Cairns Port Authority and developed with an International Hotel (Radisson Plaza) and the Pier Marketplace. The valuations in question, conducted by Mr P.F. Goodman-Jones, were set at $13,500,000 for various dates from 1995 to 1996. Shelfco contended that the unimproved value should be $12,000,000, as argued by their expert, Mr R.L. Brett.

The central legal issues revolved around the proper methodology for determining the unimproved value of the land, the impact of the lease terms and conditions on valuation, and the relevance of the plot ratio in the valuation process. The court had to decide whether the larger site area should be valued at a pro-rata rate per square metre, and if the physical quality and maintenance costs of the additional area should be considered.

The court found that the higher plot ratio of the site, which was not previously considered by the valuer, should indeed impact the valuation. However, the court held that the valuations were conservative and possibly significantly so. The court chose not to disturb the valuations, considering the valuation history and the benefit of the doubt to Shelfco. The appeals were dismissed, and the valuations by the Chief Executive were affirmed.