Capri Commercial Centre Pty Ltd v Chief Executive, Department of Natural Resources
[1999] QLC 73
•16 April 1999
[1999] QLC 73
LAND COURT, BRISBANE
16 April 1999
Re:Appeals against Annual Valuations – Valuation of Land Act 1944 – Valuation Roll Nos: 16285 and 16286.
Local Government: GCCC-Gold Coast.
Capri Commercial Centre Pty Ltd (AV97-244)
v.
Chief Executive, Department of Natural Resources
AND
Capri Commercial Centre Pty Ltd (AV97-308)
v.
Chief Executive, Department of Natural Resources
(Hearingsat Brisbane and Gold Coast) D E C I S I O N
Background:
These matters deal with two properties located at Via Roma Street and Saint Peters Place, Isle of Capri, Gold Coast, and described as Lot 315 on RP 95079 (AV97-244 – carpark) and Lot 812 on RP 107934 and Lot 428 on Plan WD5452 (AV97-308 – commercial centre). Lot 428 on WD5452 is a leased area (660m²) from the Harbours Corporation, now the Chief Executive, Department of Transport. The lands are located about 2.3 kms south- east of the Bundall Post Office and on the western side of the Nerang River about 1.2 kms west of central Surfers Paradise. The Surfers Paradise State Primary School is 300 metres west of the subject lands. The lands have areas of 2,888 square metres (carpark) and 1.194 hectares (commercial centre). The key issues are the site value of the land, method of filling the sites, added value of improvements, use of the carpark and comparison of sales.
The two parcels are the Capri Commercial Centre (Lot 812) which is zoned “General Commercial”, and the carpark (Lot 315) which is zoned “Special Facilities – Churches”, both under the City of Gold Coast (the Council) Planning Scheme of 11 February 1994, and current at the date of valuation of 1 October 1996. Lot 428 being the seabed lease is not zoned.
The two appeals were heard concurrently with a third matter for a residence for WRB Small (AV97-309) at Sorrento. Much of the evidence in respect of the method of filling the sites has commonality with the “Small” matter, and I will not repeat my reasons given for that issue.
On 10 March 1997 the Chief Executive, Department of Natural Resources, issued valuations for the subject lands at $2,000,000 (commercial centre) and $450,000 (carpark). After an objection the Chief Executive on 4 August 1997 issued confirmation of the unimproved value of the commercial centre at $2,000,000 and on 21 July 1997 issued a revised unimproved value of the carpark at $400,000. The appellant has now appealed those figures claiming the unimproved value should more properly be $1,600,000 (commercial centre) and $180,000 (carpark).
Mr R Needham of Counsel, instructed by Collas Moro, Solicitors, appeared for the appellant calling evidence from Mr SV Coote, a civil engineer; and Mr RP Wood, a registered valuer.
Mr R Paterson, Principal Legal Officer, appeared for the respondent, calling evidence from Mr C Dodd, a civil engineer, and Mr D Treston, the Departmental registered valuer responsible for determining the valuations.
The Evidence:
At the commencement of the hearing a preliminary matter of subpoenas by the respondent for certain materials from the appellant, and also from Cardno and Davies, consulting engineers, were excused on advice from Mr Paterson that the materials either never existed or no longer exist.
The Nature of the Land –
The sites and surrounding subdivisions were developed in the early 1960s, using sand pumped from the Nerang River and from the construction of canals adjacent to the subject lands. The subject lands were constructed as part of the larger scale subdivision. The commercial centre is used for the purpose of a local shopping and commercial office centre, including a service station, and is designated as a “Local Centre” under the Strategic Plan of the Council. The carpark is used for the purpose of a carpark in conjunction with the commercial centre and two religious sites adjoining the carpark, and is designated “Special Use” under the Strategic Plan of the Council.
Both sites are now generally level, well drained and flood free. Both sites have a good location, and both have good access and also medium density traffic flows and exposure
to Via Roma which is a major distributor road. St Peters Place and St Andrews Avenue are both local roads. The carpark only has physical traffic access to St Peters Place. There are signalised traffic lights at the junction of Via Roma Street and St Peters Place. All services are available, and all roads are bitumen sealed with concrete kerbing and channelling. Water access from an adjoining canal is also available to the commercial centre and the seabed lease (Lot 428).
The Value of Improvements –
(i)The Commercial Centre –
There is reasonable agreement between Mr Coote and Mr Dodd in respect of the clearing and site establishment costs, the stripping of topsoil and the costs of the revetment wall. However the parties are apart on the costs of importing the fill material, the need to either respread the topsoil or to dispose of it offsite, the need to regrass the site, the level of professional fees, contingencies, and the need for environmental studies, management and monitoring associated with the improvements to the site. A summary of those costs is as follows:
| Item | Mr Coote | Mr Dodd |
| Establishment and clearing | $15,000 | $11,280 |
| Stripping topsoil (0.5 metres deep) | $ 12,410 ($2.20 per m³) | $14,100 ($2.50 per m³) |
| Disposing of topsoil | $ 45,100 | ----- |
| Filling | $406,080 ($12 per m³) | $137,250 ($4.50 per m³) |
| Respreading topsoil | --- | $14,100 |
| Grassing | --- | $3,384 |
| Revetment wall | $20,900 ($380 per metre) | $22,528 ($400 per metre) |
| Environmental Studies, etc. | $32,000 | --- |
| Professional fees | $59,940 (12%) | $20,270 (10%) |
| Contingencies | $29,600 (5%) | --- |
| TOTALS | $621,030 | $222,912 |
Mr Coote also supplied an alternative estimate of the costs of filling by dredging as follows:
Establishment = $ 15,000 Stripping = $ 12,410
Disposal of topsoil = $ 45,100 Dredging of filling ($6/m³) = $203,040 Revetment wall = $ 20,900 Environmental studies etc. = $ 53,200 Dredging royalties = $ 35,194 Professional fees = $ 35,570 Contingencies = $ 21,020 TOTAL = $441,434
The minor difference in the establishment costs between the parties relates really to the different understanding of the extent of clearing needed, and the original low-lying nature of the site. Mr Coote allowed for some clearing of mangroves on the site, while Mr Dodd allowed for negligible (5%-10%) mangrove regrowth. The aerial photography overlay supplies by Mr Treston (Exhibit 4), supports Mr Dodd’s conclusion, and I will allow
$11,280. In the matter of the stripping of the topsoil, while he concedes that the difference of only $0.30 per cubic metre is insignificant (Transcript p.112), I will allow any benefit of doubt in the appellant’s favour and allow $14,100 for that purpose.
In the matter of the revetment wall I believe that there is evidence that some walls in that locality have shown deterioration, and that a wall has already been replaced particularly on the river. While I am aware that the commercial centre is at the end of a quieter canal, where the speed of vessels is restrained, I believe the physical environment of the rock wall is different to that experienced at the “Small” property. On balance I will allow for depreciation, and for that reason I will adopt Mr Dodd’s replacement cost of $400 per metre for this purpose.
If I consider then the need to either respread the topsoil, or to remove it from the site, I believe that the hypothetical nature of the current exercise would dictate that the most cost effective manner should be adopted for improving the site to its existing level. It is agreed by both engineers that the topsoil would not be re-used under the building or the pavement areas. I also believe it would not be appropriate to allow for any period between the hypothetical filling of the site and construction of further building works. On that basis I will make no allowance for respreading the topsoil or for regrassing the lot. However, it would be necessary to remove the topsoil from the site area.
In deciding the costs of removing the topsoil, I note that Mr Dodd has allowed for respreading the topsoil on adjoining park areas, as actually occurred in the 1960s. Mr Coote
by comparison allows for the topsoil to be carted away from truck at a cost of $8 per cubic metre, a rate not disputed by Mr Dodd.
In considering the exercise before me, I am directed to assess the subject land in its natural unimproved condition, with all of the services, facilities and improvements surrounding the land in its extant condition. Such an exercise provides little opportunity for Mr Dodd’s estimated procedure of spreading the topsoil upon a parkland which already has been filled to its finished level. On that basis it is reasonable to accept Mr Coote’s conclusion that the material must be trucked away from the site.
On the method of filling of the site for the reasons outlined in the Small decision, I will allow Mr Dodd’s estimate based upon sand pumping at $6 per cubic metre. For the reasons also explained in Small I will allow for the costs of environmental studies, management and monitoring, but not for any contingencies. I note that Mr Coote has supplied a fixed item cost of $32,000 for the environmental studies, which includes, among other costs, hydraulic studies of $10,000 and geotechnical investigations of $4,000, both based on recent comparative work undertaken further upstream of a large development at Benowa Waters.
However Mr Dodd notes that if he was to compare the broad overall rate of $800 per hectare for the Benowa Waters studies, he believes that the suggested rate of $28,500 per hectare for the smaller nature of the subject land would appear excessive. I accept Mr Coote has based some of his estimates upon small scale geotechnical studies of bore holes undertaken on the commercial centre prior to the construction of the more recent buildings.
In the hypothetical exercise that is before me, however, I am reminded that the commercial centre and the carpark sites were actually filled as part of the overall development of the subdivision of the Isle of Capri. As such it would be more appropriate to allow for any environmental studies and management, etc., as part of the overall project, in line with directions in the decision of the Land Appeal Court in Alfred Grant Estates (Surfers Paradise) Pty Ltd v. Valuer-General (1966) 33 CLLR 1 at p.7. While Benowa Waters is a significantly larger overall subdivision than the Isle of Capri subdivision, I believe a fixed rate of, say, $14,000 would be more than reasonable for the commercial centre.
On the matter of the level of professional fees, I note that Mr Coote has applied 12%, which Mr Dodd agrees is within the recommended range of fees. However, Mr Dodd feels that a figure of 10% would more reasonably reflect the level of fee most likely applied where bulk earthworks are involved on a project. Mr Coote by comparison contrasts the more extensive earthworks on the “Small” project where he allowed 10%, and claims that the
smaller nature of the subject lands would justify a fee of 12%. I will allow 12% in this matter.
I move then to the volume of filling material allowed for the subject land, and note that Mr Coote has estimated 33,840 cubic metres, and Mr Dodd has concluded 30,500 cubic metres (or 2.7 metres depth). Mr Dodd has relied upon the Departmental records of the respondent, the exactitude of which I have no evidence. Mr Coote has meanwhile sought to rely upon his geotechnical advice which suggests filling of 3 metres over the sight. I will adopt Mr Coote’s value at 33,840 cubic metres, and also his estimate of the times of twelve months to obtain the environmental approvals, four months to construct the wall, and four months for any dredging if it was applicable (Transcript p. 26). I accept Mr Treston’s allowance for interest foregone as a consequence of the development costs.
Based upon the above reasons I will allow the following estimates of cost for the commercial centre:
Establishment = $ 11,280 Stripping topsoil = $ 14,100 Disposal of topsoil = $ 45,100 Dredging of fill = $203,040 Revetment wall (56.3 metres ) = $ 22,528 Professional fees (12%) = $ 35,526 Environmental studies, etc. = $ 14,000
However to those costs will also need to be added interest foregone and depreciation on the rock wall, both of which are discussed later.
(ii) The Carpark:
Adopting a similar approach to that of the commercial centre, and for the reasons detailed in the Small decision, I have the following estimates for the site improvements for the carpark:
| Item | Mr Coote | Mr Dodd |
| Clearing and site establishment | $ 10,000 | $ 2,250 |
| Strip topsoil (0.5 metres deep) | $ 3,080 | $ 3,500 |
| Dispose of topsoil | $ 11,200 ($8/cubic metre) | ---- |
| Respread the topsoil | ---- | $ 3,500 |
| Grass the site | ---- | $ 875 |
| Filling by dredging (8,400 cubic metres) | $ 50,400 ($6/cubic metre) | $ 35,091 ($4.50/cu.metre) |
| Environmental studies, etc. | $ 26,600 | --- |
| Dredging royalties | $ 8,736 | --- |
| Professional fees | $ 9,000 (12%) | $ 4,522 (10%) |
| Contingencies | $ 5,950 | ---- |
| TOTALS | $124,966 | $ 49,738 |
For the reasons outlined for the commercial centre I will adopt the following estimates of cost for the carpark.
Clearing and establishment = $ 2,250 Stripping of topsoil = $ 3,500 Disposal of topsoil = $11,200 Filling by dredge (including royalty) = $50,400 ($6 per m³) Professional fees (12%) = $ 8,082 Environmental studies etc. = $ 7,000 TOTAL = $82,432 Plus interest foregone as discussed later. The environmental approval will be obtained in conjunction with the commercial centre, and the period of one additional month would be provided for importing the fill, based upon a pro rata basis of the commercial centre.
(3) The Highest and Best Use –
(i)The Commercial Centre –
Mr Treston has valued the commercial centre for its highest and best use as a shopping centre which he claims is essentially a local neighbourhood convenience and service centre. He notes the presence of professional offices and a medical centre, and a service station on the site, as well as the sale of fuel for a boat hire business on Lot 428 (the seabed lease). He notes the site is a busy centre with few ground floor vacancies.
In applying his adopted rate per square metre for the site, Mr Treston has made due allowance for the convenience of having the service station on the site. He has applied a percentage allowance for the seabed lease of 50% of the dry land rate, based upon his experience of such underwater leases. However, he notes that to be a conservative unimproved rate of $65 per square metre which is comparable to a residential seabed lease, where such owners have no benefit of commercial operations.
Mr Treston argues that the commercial centre, by virtue of its general commercial zoning, has certain “as-of-right” characteristics which relate to its use as a shopping centre, and which give it some advantage over comparable sales adopted. On the Gold Coast, there
is currently some resistance to the extension of new shopping centres. However, Mr Treston and Mr Wood both agree that the commercial centre services mainly the surrounding community and any use of commercial rental returns has not been allowed for in their valuations. It was also noted that the existing buildings upon the subject land are of older design and construction, and some other small commercial centres in that area may achieve higher yields.
There also appeared to be some confusion about Column 1 (“as-of-right”) use as a shop under that zoning, and Column 3 (with Council consent) as a shopping centre development. However the extent of the primary catchment area was agreed to be west of the Nerang River, while there may be some tertiary catchment overflow of the occasional visitor from the Surfers Paradise area itself.
(ii) The Carpark –
There is some difference between the valuers in respect of the highest and best use of the carpark site. Mr Wood sees the site as an inferior carpark compared to a larger carpark which is totally within the confines of a commercial centre. He has therefore valued the carpark on the basis of a top-down combined site approach with the commercial centre, and then deducted an allowance for the encumbrance for religious purposes as noted under the legal arrangement which is discussed later.
Mr Treston has taken a different bottom-up approach and valued the site on its use under the “Special Facilities (Church)” zoning, to which he has then applied a premium of 25% for the additional benefit the land brings by virtue of its use for carparking associated with the commercial centre, and the adjoining two religious centres, and the child care facility. There are 82 carparking spaces on the carpark site, which are to provide for unrestricted parking for all bona fide members of the congregations of the neighbouring churches.
In providing his valuation based upon its zoning for “Special Facilities (Church)” purpose, Mr Treston has sought support in the directions given in Royal Sydney Golf Club v. Federal Commissioner of Taxation [1954-55] 91 CLR 610. Mr Wood agrees with the principle of Royal Sydney Golf Club, but argues that he does not believe that the use of the site for carparking purposes provides any betterment to that zoning as a higher and better use than for religious purposes. Mr Wood argues that, under the constraints of the legal agreement binding the parties, it is not possible for the carpark site to be used for the construction of a church building, and hence, he argues the bottom-up approach is inappropriate.
(4) The Legal Agreement –
It is agreed by both parties that there is a legal deed of covenant between the appellant and the Gold Coast City Council (the Council), under which all bona fide members of the congregations of the three neighbouring churches have free and unrestricted parking in the carpark. The deed requires that, during the currency of the deed, the carpark land and the commercial centre land will remain in the same ownership, and that parking on both sites apparently is provided conjointly for both religious purposes and commercial purposes (sections 1 and 3). The deed is registered with the Registrar of Titles, and is binding upon both parties and their heirs, until such time as it may be cancelled.
There may be some confusion where the deed refers to access for parking to church members in “The Carpark without charge” (section 3). However, the deed only refers to the smaller area (Lot 315) as the “religious purpose land”, and generally speaks of both sites as being used for carparking purposes. On that basis I believe there is some right under the deed for church members to also have parking rights on parts of the commercial centre on certain occasions, where parking on Lot 315 may not be adequate.
The deed was apparently negotiated between the appellant and the Council in January 1991, and registered in March 1991, as part of an approval by Council for certain extensions and additions to the commercial centre, which impinged upon the then existing carparking areas of the commercial centre, resulting in those carparking areas not complying with Council’s requirements for the proposed extensions. As such the deed is an essential part of the Council’s approval of the new buildings, and binding upon the parties under the town planning provisions, and would be seen as an encumbrance upon both the carpark and the commercial centre.
Both Mr Wood and Mr Treston have valued the carpark and the commercial centre as separate valuations under section 34 of the Valuation of Land Act. The carpark certainly adds value to the commercial centre, but it is doubtful whether such reciprocal benefit would apply to the carpark site for its use for religious purposes, except in so far as the commercial centre allows an overflow capacity on certain occasions.
However, at times when the religious centres were likely to place greatest demand on the carpark (Lot 315), during weekends and evenings, the other carparking at the commercial centre was also likely to be available for patrons as well as the church members, adding little extra value beyond that provided by Lot 315. On balance I believe that the restriction on the use of Lot 315 by virtue of the covenant, would be greater than the benefit that site gains from the parking on the commercial centre.
Mr Paterson argues that the Chief Executive is required to value the subject land as if it were a fee simple title under section 14(1). He argues further that encumbrances endorsed upon a deed of grant, or on a certificate of title, are to be disregarded in arriving at the value of the fee simple (Transcript p. 283). Mr Paterson argues that the agreement has characteristics of both the action of registering the deed of covenant on the title which is an action of a restriction on title; and also the wording of the covenant which is in effect a modification of the zoning of the land under the town planning scheme in operation.
In respect of his understanding that no allowance is to be made in the valuation for the impact of any restriction upon the title, I understand such to be the case where a local government has given notice, or registered a caveat on the title, in respect of any realignment of a road under section 14(2)(b). I also understand that restrictions on title such as mortgagees or other encumbrances are not to be taken into account in the valuation. However I note also that under section 14(4) of the Act, a legally enforceable registered easement must be taken into consideration when valuing any land.
I note also that the deed of covenant was made under the provisions of s.33(1)(1B) of the Local Government Act 1936-1985, which states:
“(1B)(a)Where lands in the same ownership are separated by a road and such lands are proposed to be used conjointly for a purpose that is permissible under a town planning scheme, it shall be competent for the Local Authority to enter into an agreement with the owner of such lands providing for their conjoint use for such purpose subject to the lands in question remaining in the same ownership.
(b) Where an agreement pursuant to paragraph (a) has been entered into the Local Authority shall within a period of 30 days from the date thereof produce to the Registrar of Titles an application to register the agreement referred to, accompanied by an executed copy of the agreement, and the Registrar of Titles shall register that agreement upon all grants or certificates of title to the lands concerned and thereafter such agreement shall, until it is cancelled, be binding upon every person who was, at the time of making thereof, or who at any time after the making thereof becomes possessed of an estate or interest in or in connection with such lands.
(c)An agreement registered pursuant to paragraph (b) may be cancelled either wholly or in part, and upon the application of the registered proprietor of the lands, the subject of the agreement, with his signature duly attested pursuant to the provisions of section 115 of the Real Property Act 1861 - 1980 and with the written consent of the Local Authority endorsed thereon, the Registrar of Titles shall endorse a memorial on the grants or certificates of title to the lands concerned to the effect that the agreement is cancelled either wholly or in part as the case may be. ”
These provisions were then incorporated into the Local Government (Planning and Environment) Act 1990 in section 4.17(1) which says:
“ 4.17(1) Where lands –
(a)are not adjoining lands; and
(b)are held in common ownership; and
(c)are not more than 500m from each other; and
(d)are proposed to be used conjointly for a purpose that is either permitted or permissible under a planning scheme;
and all necessary approvals required under the planning scheme and this Act have been obtained, the local government may enter into an agreement with the owner of those lands to allow for those for their conjoint use for that purpose conditionally upon the lands remaining in common ownership.
(2)Where an agreement pursuant to subsection (1) has been entered into the local government is to apply to the relevant registering authority to register or record the agreement and a signed copy of the agreement.
(2A) The registering authority is to record particulars of that agreement on the register in respect of the relevant lands and thereafter the agreement is, until it is cancelled, binding on successors in title.
(3) An agreement registered pursuant to subsections (2) and (2A) may be cancelled (in whole or in part) upon the application of the owner of the lands which are subject to the agreement and with the approval of the local government endorsed thereon. ”
The Local Government (Planning & Environment) Act 1990 was assented to on 18 September 1990, and its provisions commenced on 15 April 1991.
Clearly the Act makes provision on the subject lands for the appellant to make application under s.33(1)(1B)(c) for cancellation of the agreement, but only subject to the written consent of the local authority. In the circumstances of the background to the agreement in this matter, and the need at that time for the additional carparking spaces in order to approve the new building extension, that may not be approved by the Council.
Mr Paterson argues that the correct legal approach would be to follow the principle established in Royal Sydney Golf Club, and value the subject for its current zoning and then make some allowance for the likelihood of any potential removal of the restrictions imposed by the agreement with the Council. To support his view that there was some likelihood of the zoning of the carpark to a higher land use, Mr Treston notes that the child care centre adjoining to the north (Lot 314) must have been rezoned in order for the child care centre to now operate. The question he argues is for the Court to place some quantification upon the likelihood of the removal of that restriction.
Mr Needham agrees that the principle outlined in Royal Sydney Golf Club assists us in this matter, but he draws a different conclusion from that analogy. It is Mr Needham’s argument that there was no likelihood of the Council agreeing to cancelling the agreement, presumably in the public interest of the church congregation. Mr Needham therefore argues that the highest and best use of the land is really as a carpark, in association with the churches and the commercial centre.
Mr Needham argues that the principle of valuing the land for its highest and best use, and not strictly according to its zoning, may be found in the decision of the Land Appeal Court in AK and SS Gallagher v. Brisbane City Council (1975) 2 QLCR 368 at 380. In that matter it was noted that while zoning of land will always affect the highest and best use of the land, it does not create that highest and best use, which remains constant, although changes in zoning may facilitate or inhibit its realisation to the owner. The impact of zoning upon the land was also discussed by Wells J in The Minister of Environment v. Petroccia [1982] 30 SASR 333, at p. 343.
(5) The Method of Valuation –
In seeking the unimproved value of the commercial centre both valuers have sought to compare the subject land as a developed site with sales of comparable vacant lands in the area, and then to deduct the added value of the site improvements. Mr Wood also compared two unimproved parcels (his Sales 1 and 2) as a check on his other method.
In seeking the unimproved value of the carpark site, Mr Treston has sought comparisons with similar zoned lands for religious purposes and made an allowance for his perceived benefit of the carparking agreement (25%), after deducting the site improvements. Mr Wood by comparison has sought to determine the unimproved value of the carpark by assessing its site value as representing 75% of the site value of the commercial centre, and then deducting the site improvements. Mr Wood believes it would be inappropriate to value the carpark as a separate independent site in view of the legal impediment of the agreement.
In arriving at the unimproved values by comparing with his sales of unimproved land, Mr Wood has concluded:
Commercial centre = $ 640,000 Carpark = $ 120,000
By adopting the method of deducting improvements from the developed site value, Mr Wood concludes:
Commercial centre = $ 540,000 Carpark = $ 55,000
In support of Mr Treston’s method of valuing the carpark for its use under the existing zoning of “Special Facilities (Churches)”, Mr Paterson distinguishes the findings of Stubberfield v. Valuer-General (1988-89) 12 QLCR 328. In that matter the Full Court of Queensland found that a prospective rezoning should have been allowed for, in view of the impact of a proposed new town plan for the shire which proposed a change in the zoning of the land. In the current matter there is no argument in respect of the zoning of the carpark site being for “Special Facilities (Churches)”. Mr Paterson argues that an application of the principle in Stubberfield to assess the impact of the potential use of the carpark is not appropriate. On that basis he rejects Mr Wood’s approach to the valuation of the carpark.
Mr Treston however concedes that it was most unlikely that the appellant would seek to alter the existing agreement for use of the carpark, as part of the parking requirements associated with the building extensions on the commercial centre, in view of the more stringent ratio now required between retail space and carparking space.
(6) Comparison of Sales –
In support of his estimate of the unimproved value, Mr Wood provides the following sales:
· Sale 1 – (Napper Road and Olsen Avenue, Parkwood) – Lots 81 and 82 on RP885521.
This is the sale of two adjoining unimproved lots (Witan Nominees Pty Ltd to Tonga Investment Pty Ltd) subject to rezoning to “Special Facilities” for the development of a medical centre, offices, showrooms, childrens play outlet and a service station. The sale is located at the junction of two high traffic volume divided arterial roads carrying up to 40,000 vehicles per day at that time (Olsen Avenue), and demands higher rentals than the subject. The sale has an area of 40,018 square metres and sold in January 1995 for $2,200,000 ($54.98 per square metre).
· Sale 2 – (3 Wintergreen Drive, Parkwood – Lot 77 on RP 835709)
This is a sale of a vacant unimproved corner lot on Olsen Avenue, zoned “Special Facilities Hotel” being the site for the Parkwood Tavern and Liquor Barn. Subsequent to the sale earthworks were undertaken prior to construction of the buildings. It was a different zoning to the subject and is seen as comparable due to the commercial development on the sale. The sale has an area of 10,390 square metres and sold (Witan Nominees Pty Ltd to Fernbridge Pty Ltd) in January 1993 for
$800,000 ($77 per square metre).
· Sale 3 – (a) (Bermuda Street & Christine Avenue, Burleigh Waters – Lot 405-406 on RP 867747.
This sold in April 1994 (Newcastle Guaranteed Pty Ltd to Rayjon Properties Pty Ltd) for $3,980,000 ($99.50 per square metre), and has an area of 40,000 square metres.
(b) (Lot 405 on RP 867747)
“Residential B” sold Rayjon Properties Pty Ltd to Roseland Properties Pty Ltd in August 1994 for $2,398,000 ($135 per square metre), and has an area of 17,750 square metres.
(c) (Lot 406 on RP 867747)
“Local Business Commercial” analysed as the balance of the purchase price and developed as the “Christine Corner Convenience Centre” showing an analysed rate of
$71.10 per square metre.
Lot 406 is a prime corner position on Bermuda Street (90,000 vehicles per day), and is superior to the subject.
· Sale 4 – (Cnr Reedy Creek Road, Burleigh Waters – Lot 24 on RP 853120).
This is the sale of a cleared and level corner vacant lot zoned “Special Facility Restaurant” of area 3068 square metres, and subsequently developed as a McDonalds restaurant. The sale is superior to the subject due to its superior location, smaller size and the commercial nature of the development. The sale sold in March 1993 for
$380,000 ($123.86 per square metre).
· Sale 5 – (“Central Park Plaza”, Southport-Nerang Road, Ashmore – Lots 1, 2 and 3 on RP 217869)
This was the sale of three Commercial “Special Facility Showrooms” with excellent exposure to the main four-lane arterial road, adjoining commercial showrooms to the east, and residential subdivision to the west. Seen as inferior due to its lower commercial zoning. The sale has an area of 19,192 square metres and sold in June 1996 (Catmandu Pty Ltd and Max Christmas Pty Ltd to Tonga Investment Pty Ltd) for $1,400,000 ($72.95 per square metre).
· Sale 6 – (“Central Park Plaza, Ashmore – Lots 6 to 13 on RP 217869)
This is similar to Sale 5, adjoins a BP service station to the east, and existing commercial showrooms to the west. Similar in size to subject, but inferior on a cleared site basis. The sale has an area of 13,753 square metres and sold in August 1996 (Catmandu Pty Ltd to Strata Builders Pty Ltd), for $730,000 ($53.05 per square metre).
In support of his valuation Mr Treston provides the following sales of developed vacant sites:
A - for the commercial centre –
·Sale 1 – (22 Crombie Avenue, Bundall – Lot 2 on RP 116653)
This is a 3,915 square metre zoned “Commercial Industry” vacant developed lot at the corner of Bundall Road, adjoining the Gold Coast Mail Centre and opposite the Gold Coast City Council Chambers. Access is good and all services are available. The sale is seen as overall inferior to the subject, and while better
located in a commercial precinct with superior traffic flows, the sale is smaller and has a lesser zoning. The sale is superior on a pro rata basis, but inferior overall due to size.
The sale sold in November 1995 for $1,350,000, plus demolition costs of $25,000 ($351 per square metre), which after analysis was analysed at $1,292,143 ($330 per square metre), and applied at $1,200,000 ($306 per square metre).
· Sale 2 – (13-17 Tonga Place, Parkwood – Lot 53 and 54 on RP 907361)
This is a 7,603 square metre zoned “Special Facilities” parcel opposite the Southport Lawn Cemetery and near the Griffith University Gold Coast Campus. Access is good, and entry from Olsen Avenue is available onto Lot 54 and then exit is via access easements across the parcels to Tonga Place at the rear of the lots. There is a restricted access easement along most of the frontage to Olsen Avenue. Olsen Avenue is a divided road and southbound traffic to the site must turn at traffic lights to the south of the sale. Overall the sale is inferior, and also inferior on a pro rata basis.
The sale sold in May 1996 for $1,510,000 ($198.60 per square metre), and after allowing for improvements, was analysed at $1,411,899 ($185 per square metre), and applied at $1,390,000 ($182.80 per square metre).
· Sale 3 – (81 Ashmore Road, Bundall – Lot 5 on RP 189783)
This is a 2.542 ha zoned “Commercial Industry” parcel on the corner of Racecourse Drive, located in the commercial precinct along Ashmore Road. Access is very good and the intersection is controlled by traffic lights. The sale was L-shaped extending behind four existing parcels fronting Ashmore Road, and there is a drainage easement passing across the rear part of the parcel towards its eastern end. The sale was negotiated in early 1997 but settlement did not occur until April 1998 after the site had been decontaminated. The sale is overall superior to the subject due to the better exposure of the sale, although access and zoning are inferior to the subject.
The sale sold (BHP Titanium Minerals Pty Ltd to Agincourt Properties Pty Ltd) in April 1998 for $3,650,000, plus $100,000 for demolition, which after allowing for improvements was analysed at $3,153,566 ($124 per square metre), and applied at
$2,850,000 ($112 per square metre).
· Sale 4 – (2-4 Tonga Place, Parkwood – Lot 3 on RP 892732)
This is a 4701 square metre zoned “Special Facilities” for a service station, neighbourhood store and restaurant and fast food take away purposes. The parcel sold (Tonga Investments Pty Ltd to the Shell Company of Australia Limited) with site approval for a service station in place. The sale fronts Olsen Avenue and has good direct access for north moving traffic, but access is restricted by a median strip for south moving traffic.
The Shell Company decided not to continue with the project, and resold back to Tonga Investments Pty Ltd in February 1998 for $1,250,000. Overall the sale is
inferior to the subject, but is superior on a pro rata fully developed basis and also on an unimproved basis.
The sale sold in May 1996 for $1,200,000 ($255 per square metre), which after allowing for improvements was analysed at $1,060,511 ($225 per square metre), and applied at $1,000,000 ($212.75 per square metre).
B - for the carpark –
· Sale 1 – (Robina Town Centre Drive, Robina – Lot 151 on RP 892176)
This is a 4,375 square metre parcel zoned under the Robina Town Centre Planning Act 1992, and subsequently developed as a church facility and child care centre. The sale was extensively filled prior to sale, and is seen as superior to the subject due to its location and size and is also superior on a pro rata basis.
The sale sold in November 1996 for $656,250 ($150 per square metre), which after allowing for improvements was analysed at $564,870, and applied at $470,000.
· Sale 2 – (Nerang-Murwillumbah Road, Mount Nathan – Lot 12 on RP 225810)
This is a 3.31 hectare parcel zoned “Park Residential” located in a rural residential community. Access and services are good, and the sale was purchased subject to approval for operation as a church. The site was formerly a plant nursery. The sale is overall superior to the subject as a church site due to size.
The sale sold in May 1996 (Countrywide Estates Pty Ltd to Church of Jesus Christ of Latter-Day Saints) for $425,000, which after allowing for improvements was analysed at $420,000, and applied at $315,000.
· Sale 3 – (610 Nerang-Boadbeach Road, Carrara – Lots 9 and 10 on RP 112893 and Lot 1 on RP 123341).
This is an 8663 square metre parcel zoned “Park Residential”, and has a Nerang River frontage. Access is restricted by heavy volumes of traffic along the Nerang- Broadbeach Road, but all services are available, and the sale was purchased for use as a church site. The sale is superior to the subject due to size and river frontage.
The sale sold (Pryke to International Buddhist Association of Queensland) in August 1997 for $1,050,000, which after allowing for improvements was analysed at
$1,025,700, and applied at $800,000.
· Sale 4 – (200 Scarborough Street, Southport – Lots 23 & 29 on RP 4733).
This is a parcel of 607 square metres zoned “Residential Multi Unit” which adjoins a child care centre, and is on the fringe of the Southport Commercial Precinct. The sale was purchased by the child care centre for the purpose of carparking, and the existing dwelling was demolished. The sale is inferior to the subject due to size.
The sale sold in February 1996 for $200,000, plus demolition costs of $5,000, which after allowing for improvements was analysed at $204,000 ($336 per square metre), and applied under section 17 at $97,000.
(i) The Commercial Centre Sales –
In seeking comparison between the subject and the adopted sales, Mr Wood placed some reliance upon the current commercial rents obtained in those areas. He notes for example that rents received for commercial properties were seen in the property industry as a guide to the relative value of commercial lands. He notes that rents achieved at his Sale 1 range from $190 per square metre to $425 per square metre, while rents obtained on the subject land varied from $160 per square metre (upper floors) to $200 per square metre (ground floor). Those rents, in his opinion, support his conclusion that his Sale 1 is superior to the subject, reflecting that sale's location in the fastest-growing area on the Gold Coast.
It is also noted however that Mr Wood’s Sale 1 was of a much larger area than the subject, and was virtually for an undeveloped site, compared to the developed site nature being adopted for the subject land. Mr Wood agrees that while Sale 1 was purchased subject to rezoning, the purchaser would have later also had to pay for further headworks charges and for the risk of changing from “Future Urban” to “Special Facilities”. Indeed Mr Treston’s Sale 2 is a subsequent sale of part of Mr Wood’s Sale 1 after certain fill and development works were completed.
There is also a difference between the valuers in respect of the impact of the access easements upon Mr Treston’s Sale 2. Mr Treston sees those easements as an encumbrance upon the title, and therefore a detriment to the value of his Sale 2. Mr Wood feels the access easements virtually increase exposure on Sale 2, by virtue of their in effect providing a drive- through situation for customers. However while Sale 2 has some restriction by the access easement, Sale 2 also has reciprocal benefits of access over similar access easements on the adjoining parcels.
While Mr Treston sees his Sale 2 as inferior to the subject on a per square metre basis, Mr Wood disagrees and argues that Sale 2 is far superior as supported by the analysed rental rates per square metre, and because of its superior location. Mr Treston also notes that to his knowledge there are no plans to construct the unformed part of Napper Road to the north of Lot 54 on Sale 2. Mr Wood believes a slip road turning lane was likely to be constructed into Napper Road at a later date. Mr Wood sees no difference in the potential value of Mr Treston’s Sale 2 and the subject as a result of the difference in zonings. Mr Treston agrees that the “Special Facilities” zoning does allow commercial operations.
In comparing Mr Treston’s Sale 3, both valuers agree that the sale is superior. However there is difference between the valuers in respect of Mr Treston’s Sale 4. Mr Wood argues that the negotiation of Sale 4 was on the understanding by the Shell Company that access from both north and southbound traffic would be available directly across the median strip. When that did not eventuate, he argues, Shell resold the land back to the former vendor at virtually the former sale price plus costs lost in the transfer process. On that understanding Mr Wood challenges Mr Treston’s analysis of his Sale 4, that it had inferior access to the subject. Mr Treston concedes that he did not fully investigate the reasons why the Shell Company resold the site back to the former vendor. Mr Wood argues that on the understanding at the time of Sale 4, access to that parcel would have been superior to the subject.
Mr Treston notes that his Sale 4 was really supplementary evidence to demonstrate the high value of service station sites, as there was a service station on the subject land. However Mr Needham argues that such costs really reflect the new larger self-service style of service stations now being developed and not the older style service stations as currently on the subject land. In his final address Mr Needham notes that in his Sale 4 Mr Treston has analysed a rate of $225 per square metre for the key strategic locations for a service station. He argues that if that was translated to the subject land to the existing service station site, the rate for the subject land must be at something less than $225 per square metre. Mr Needham notes that Mr Treston has applied an overall rate for the subject land at $220 per square metre for the entire site, including the area at the rear of the commercial centre near the boat refuelling area. Mr Needham argues that such comparisons are not logical.
Mr Treston also notes that Mr Wood’s Sales 1 and 2 were from a mortgagee-in- possession. While he accepts that such sales should not be rejected on that basis, as the mortgagee is required by law to seek a fair value for the land, he would treat those sales with some caution, and would weight that sale accordingly. Mr Treston also notes, in his opinion, that several metres of cut and fill were required on Mr Wood’s Sale 1, which is some 3 to 4 metres below Olsen Avenue, and above the Council retardation basin on the adjoining Lot 80 to the west.
Mr Treston also has some concern with Mr Wood’s Sale 3(b) because of its different zoning as “Residential B”. Mr Wood argues that the use of his Sale 3(b) was merely to arrive at an apportioned value for his Sale 3(c). He argues that the purchasers of Sale 3(a) bought the land with the intention of subdividing and selling off the “Residential B” land. By that process he believes his Sale 3(c) provides a conservative comparison of land used for commercial purposes. Mr Treston rejects the use of an apportionment in that manner and
feels that only Sale 3(a) provides any assistance. Mr Woods concedes that at the date of Sale 3(a) part of the land was not zoned as “Residential B”.
Apparently, action to rezone the land was then currently before the Local Government Court in the matter of Hembrow v. Council of the Shire of Albert and Pacific Exchange Corporation Pty Ltd. A decision in that matter was given by order of July 1994. Mr Hembrow was apparently with Rayjon Properties Pty Ltd, and continued the appeal seeking rezoning on Rayjon’s behalf. As such, at the time of Sale 3(a), there continued to remain an element of risk involved in getting the rezoning for “Residential B” for part of the land, a factor no doubt included in the purchaser’s offer. In his analysis of Mr Wood’s Sale 3(a), Mr Treston had been led to understand that part of that land had already been zoned as “Residential B” at that time (Transcript p. 276). Both parties agree that some allowance should therefore be made for the impact of the risk taken by Rayjon in Sale 3(a), and any added value that would have attached to Sale (b) as a consequence of the risk, although Mr Treston was still very cautious about using Sale 3(c) in that manner.
Another matter of concern to Mr Treston was the apparent saturation level of the commercial shopping market at that time on the Gold Coast. This he felt was to the advantage of the subject land, which already had the advantage of an existing as-of-right zoning for commercial shopping purposes. However Mr Needham argues that Sale 3(a) demonstrates that Rayjon Industries Pty Ltd, who are experienced developers of shopping centres, pursued that sale in order to develop the “Christine Corner” convenience centre, suggesting there remained a market for such developments.
Mr Treston also rejects Mr Wood’s Sale 4 because of its age (1993), and his Sales 5 and 6 as being zoned for a different purpose being “Special Facilities – Showroom”, and also as it is an inferior location. Mr Woods has seen his Sales 5 and 6 as less comparable than his other sales.
In considering Mr Treston’s Sale 3 it was agreed that Sale 3 was subsequently subdivided, and part of the rear land was sold off to an adjoining owner to the east of Lot 5 (Harvey Norman) for amalgamation with those lands. At the time of Sale 3 Mr Wood argues that the purchaser (Agincourt Properties Pty Ltd) was aware of Harvey Norman’s interest in part of the land. In analysing his Sale 3 Mr Treston has valued the land with frontage to Ashmore Road at $200 per square metre (14,075 square metres), and the rear land behind the other separate parcels at $82.50 per square metre (11,345 square metres). However Mr Needham notes that at the date of Sale 3 there was no concluded agreement with Harvey Norman, as demonstrated by the subsequent subdivision of Lot 5 into five parcels, three of
which were subsequently purchased by Harvey Norman. The original Sale 3 must therefore have made allowance for the risk of not concluding any sales to Harvey Norman.
(ii) The Carpark Sales –
Mr Treston argues that land used for religious purposes may have certain ancillary uses approved giving exemptions from the payment of rates charges on those lands, under section 24F of the Local Government Act 1936-1985 (now Local Government Act 1993 Volume 2 section 957(2)).
He further argues that a child care centre may satisfy those requirements. He has therefore sought to compare the carpark land of the subject with lands purchased for religious purposes, and which might be afforded certain leniency in respect of their operations. He argues that his Sale 1 (the carpark comparison) reflects a value of only $150 per square metre for such purposes, and a church has subsequently been built upon his Sale 1.
However Mr Treston agrees that he has placed little weight upon his Sale 2, which is located well away from the subject land. He gets more support from his Sale 3 which is still well to the west of the subject, but that sale really reflects three residential sites fronting the river. He suggests there is no real market for churches and they pay the market value for land for other purposes. Mr Treston supplied his Sale 4 to demonstrate what a commercial child care centre had to pay to acquire parking for its clients.
Decision:
(i) Site Value –
I turn first to the matter of the improved site value of the property.
(A) The Commercial Centre –
In valuing the centre as a local neighbourhood service centre for the Isle of Capri, the valuers have drawn the following comparisons:
| Sale | Analysed price per/m² | Mr Wood | Mr Treston |
| Wood 1 | $54.98 | Superior larger | --- |
| Wood 2 | $77.00 | Comparable larger | --- |
| Wood 3(a) | $99.50 | Superior larger | --- |
| Wood 3(c) | Apportion $71.10 | Superior larger | --- |
| Wood 4 | $123.86 | Superior smaller | --- |
| Wood 5 | $ 72.95 | Inferior larger | --- |
| Wood 6 | $ 53.05 | Inferior larger | --- |
| Treston 1 | $330.00 | --- | Superior smaller |
| Treston 2 | $185.00 | Superior smaller | Inferior smaller |
| Treston 3 | $124.00 | Superior larger | Superior larger |
| Treston 4 | $225.00 | Superior smaller | Inferior smaller |
After allowing for differences in areas of the sales I find that Mr Wood sees the commercial centre site at $100 per square metre, and Mr Treston at $220 per square metre. On the evidence before me I believe that the most useful sales are Mr Wood’s Sales 3(a) and 4, and Mr Treston’s Sales 1, 2 and 3.
In deciding to place less weight on Mr Wood’s Sales 1 and 2 I note that there are difficulties with the extent of subsequent development costs and headworks charges associated with those sales as fully developed sites, and also re-zoning differences. In the matter of his Sale 3(c) I note that is an apportionment, and I place some caution on its application. And in respect of his Sales 5 and 6 I see their lesser zoning making comparisons more subjective.
In respect of Mr Treston’s Sale 4 I believe he has drawn an inappropriate conclusion in respect of the understanding of the Shell Company, and why it later resold back to the former vendor. I find some confidence in Mr Needham’s conclusion that the sale initially was based upon an incorrect understanding on the quality of all direction access to that sale. I would agree with Mr Wood that Sale 4 was probably superior to the subject.
If I then consider the varying opinions of the valuers on Mr Treston’s Sale 2, I find the main difference between them is in the impact of the easement upon that sale. There is no doubt in my mind that, under normal circumstances, an easement for access across land creates some impediment to the title. However I note that that easement is but part of a group of similar easements across adjoining parcels which provides some access benefits to Sale 2. The impact of all of those easements is to provide for a flow of traffic from all the sites, which could be of some advantage from a commercial perspective. On balance I would make little allowance for any detriment, and that sale could perhaps be comparable but smaller.
On the understanding that it is usual for larger areas to demonstrate a lower rate per square metre than for comparable but smaller areas, I would then find that the subject land could have a value less than the comparable, but smaller, analysed Sale 2 ($185.00). In comparing Mr Treston’s Sale 3 I note that both valuers agree that sale to be superior, but larger than the subject. That sale was likely to have involved some element of risk associated with not being able to guarantee a subsequent sale to Harvey Norman. Such risk would have been reflected in the rate of $124 per square metre, which would be slightly conservative. A similar comment could also be applied to Mr Wood’s Sale 3(a) due to the risk of not
achieving the rezoning of the Residential B land, and its subsequent sale to Rayjon Pty Ltd. On balance any adjustments to those possible risks in the sale would have the result of increasing Mr Wood’s comparison with the subject to a level above $100 per square metre.
In comparing Mr Treston’s Sale 1, I find that there is a large difference in the area, being only one-quarter of the area of the subject and considerably superior in location. I feel any influence of Sale 1 on Mr Treston’s comparison could have the effect of inflating the valuation. However a similar comparison with Mr Wood’s Sale 3(a), which is nearly four times larger than the subject, and also superior in location, would have the potential to reduce Mr Wood’s estimate of the value. On balance I see no reason for adopting a value based upon either of those two comparisons.
If I then compare the subject with the apportionment of Mr Treston’s Sale 3 fronting Ashmore Road ($200 per square metre), which is larger than the subject, allowing something for the smaller area of the subject, and the risk involved in Sale 3, the subject could have a value at more than $200 per square metre. On balance I will adopt $180 per square metre for the subject land. That would appear to provide some consistency for the service station site on the subject and the rear canal land of the subject, to average out at $180 per square metre. In arriving at the value of the sub surface marine lease land, I will accept Mr Treston’s conservative value of $65 per square metre.
(B) The Carpark –
In valuing the carpark I first note Mr Treston’s comparisons with his Sales 1, 2 and 3 which were all for the purpose of erecting church buildings. I note that each of those sales were considered superior as follows:
Sale 1 ($150 per square metre) = Superior – larger Sale 2 ($12.84 per square metre) = Superior – larger Sale 3 ($121.20 per square metre) = Superior – larger
In further understanding his Sale 2 I note also that Mr Treston has placed little weight himself upon that sale because of its disparity with the subject in both size, zoning and location. In respect of his Sale 3, I also note that sale has a direct frontage to the Nerang River, and is zoned as "Park Residential”, and I see little comparability in either Sales 2 or 3. If I then consider his Sale 1, I note that such sale to be 50% larger than the subject, and in a superior location. The sale also has the full potential to erect buildings for religious purposes and has subsequently erected a church and a child care centre. Because of its size at 4,375 square metres, there is clearly room for parking within the curtilages of that site. On balance I see Sale 1 as considerably superior in respect of its use for its declared zone purpose.
By contrast the subject carpark is prevented from developing any buildings for church related services, and has got one development use as a carpark. As such I believe the carpark site has a residual value considerably less than other comparable, but unrestricted church sites. It is agreed however that the carpark site also has the additional benefit under the legal agreement with the Capri Commercial centre, to have guaranteed access to the carpark land (Lot 315), and possibly also the carpark on the commercial centre land (Lot 812). However any additional benefit of access to Lot 812 must be weighed against the fact that the church members do not have absolute use of Lot 315, and share the parking with the commercial centre customers.
Mr Treston’s Sale 4 was provided merely to demonstrate what a commercial child care centre would pay in order to acquire adjoining space for use for carparking ($337.72 per square metre). However because of the different zoning, the commercial nature of the Sale 4 property, and the very small proportional size of Sale 4 compared with the subject land (21%), I gain little assistance from that sale.
In drawing comparison with Sale 1 I note Mr Paterson’s reliance upon the principle established in Royal Sydney Golf Club (supra). In that matter the High Court of Australia directed at page 625:
“The first question in the case stated should therefore be answered that in arriving at the unimproved value under the Land Tax Assessment Act of the land the subject of the appeal the land should not be valued without regard to the provisions and effect of the County of Cumberland Planning Scheme.”
In that matter the High Court was also asked to determine whether the surrounding golf course land, excluding the golf course building, was liable for assessment as vacant land, or whether that land should be considered as curtilages of the building. The High Court determined that the golf course land was to be treated as vacant land for the purposes of the County of Cumberland Planning Ordinance, and not incidental to the club building.
In considering the current restrictions upon the carpark (Lot 315), I note that there is the restriction imposed by the zoning and also a further restriction imposed by the lease agreement. The principle of Royal Sydney Golf Club is that the zoning of Lot 315 must be considered in the valuation, as it is “a restriction which arises from the law affecting an area in which the land lies” (page 624).
Mr Paterson sees the lease agreement in the current matter as a restriction of the legal zoning and asked the question what is the likelihood of that restriction being removed? He then seeks to add something to the value of the land for its zoned purpose with the restriction imposed, in order to allow for any possible removal of the legal restriction upon the use under that zoning. He argues that it would be against the principle established in Royal
Sydney Golf Club that the existing zoning must be considered, if the approach of Mr Wood was to be adopted.
The matter of a restriction upon the use of land was also considered in Langford and Another v. Western Lands Commissioner (1959) 4 LGRA 46. In that matter certain restrictions upon the leasehold title of Western Lands was argued to be similar to the principle espoused in the Royal Sydney Golf Club. However Hardy J found that restriction to flow from the owner's title, and not from the general law of New South Wales, and distinguished that matter from the principle of Royal Sydney Golf Club. The fee simple of that land was thus not burdened for valuation purposes (page 53).
In the current matter the zoning is an outcome of the law of the State of Queensland, and while the lease agreement is registered against the title of Lot 315, its principal thrust is to protect the rights enshrined in the zoned lands adjoining Lot 315. The lease agreement was also implemented under section 33 of the Local Government Act 1936, and may be distinguished from Langford.
The matter of a restriction on title covering the use of lands was also discussed in Gollan and Another v. Randwick Municipal Council [1960] 3 All ER 449. In that matter a restriction imposed upon the deed of grant for a racecourse was found to not impact the unimproved value of the land for the purposes of the Valuation of Land Act in New South Wales. Their Lordships found at page 455:
“ ‘the fee simple of the land’, as used in s. 6, does not refer to the actual title vested in the owner at the relevant date but to an absolute or pure title such as constitutes full ownership in the eyes of the law.”
However their Lordships went on to note at page 455:
“For while burdens on individual title may naturally enough be treated as irrelevant under a general rating scheme, it would hardly be possible to expect that similar treatment was intended to be given when it came to valuing a person’s individual interest for any of these other purposes.”
However the restriction imposed in Gollan arose from the conditions of the original deed of grant, and did not arise from any encompassing state planning law. The current legal agreement, in my opinion, may be distinguished because of its genesis in section 33 of the Local Government Act 1936, which provides for planning controls across the State.
I also acknowledge guidance in the decision of Gallagher v. Brisbane City Council (1975) 2 QLCR 368 in respect of the determination of highest and best use of the land. In that matter the Land Appeal Court found in determining compensation for the land resumed, that the existing zoning will always affect the highest and best use, but it does not create it. The Land Appeal Court found that, while the highest and best use was different from the
permitted use under the zoning, the claimant was entitled to receive the present value of the highest and best use. However I believe that matter can be distinguished as it involved a matter of resumption of land, where the owner was entitled to receive compensation for his loss. The current matter deals with an annual valuation for revenue rating purposes, and the zoning only has the impact of preventing highest and best use at the time of the valuation at 1 October 1996.
The impact of zoning was also discussed in The Minister v. Petroccia (supra), where Wells J examined the difference between a permitted use, a prohibited use, and a consent use under the zoning restriction. He went on to note at page 344 what a valuer (and the Court) must do in such cases of consent use, is to determine the probability or improbability that consent would be granted. Such a task has some analogy with Mr Paterson’s proposal for the subject land in respect of whether the restriction of the legal agreement might be removed.
In view of the correlation between the parking requirements of the commercial centre complex, and the use of the carpark site as part of the approval for the new building extensions on Lot 812, I see little chance of a relinquishment of the legal agreement by the Council. For that reason I make no variation in the unimproved value of Lot 315 for that purpose.
So in assessing the carpark (Lot 315) I find that I must make provision for its current zoning for “Special Facilities (Churches)”, and it would not, in my opinion, be appropriate to assess the land on the basis of its use for some diminished “General Commercial” purpose. The lease agreement should be seen as an extension of the planning control on the land, and as such should not be ignored in assessing the fee simple of the parcel. However, I do not accept Mr Treston’s view that the lease agreement actually brings some additional added value to the land, and above what the land might enjoy for its current zoning.
The lease agreement as noted previously, is a further restriction on the current zoning and, in my opinion, would be a detriment to the value for that purpose. Mr Treston has determined by comparison a value of Lot 315 at $135 per square metre to which, he has added 25% for the lease agreement after allowing for improvements, giving an adopted rate of $143.22 per square metre. On my adjusted assessment of his Sale 1, I believe a figure for the site value by direct comparison at something less than $135 per square metre would be appropriate. To that I would deduct an amount to represent the restriction placed upon the use of Lot 315 by the legal agreement.
As a separate parcel for valuation purposes I believe the restriction upon Lot 315 would represent a significant part of its potential use as a church site, and I will allow 25%
for that purpose, giving it a site value of $101.25 per square metre, or say $100 per square metre.
(ii) Determination of Unimproved Value –
(A)The Commercial Centre –
Site value 11280m² @ $180 per m² = $2,030,400
Establishment costs = 11,280 Stripping of topsoil = 14,100 Disposal of topsoil = 45,100 Filling = 203,040 Total Works = 273,520
Plus Interest at 7.87% for 12 mths =
Total cost of filling and clearing
10,763
=
$ 284,283
Revetment wall costs
=
22,528
$1,746,117 Less
Depreciation (33%)
=
7,434
Net added value of Revetment wall =
15,094
Interest at 7.87% for 4 mths Total revetment wall =
=
295 $ 15,389
$1,730,728
Professional fees (12%)
=
35,526
Environmental studies = 14,000 $1,681,202 Less rates for 6 mths
=
5,608
Less land tax for 6 mths = 18,000 $1,657,594 Less interest on land for 6 mths at 7.87%
=
65,226
$1,592,368
Plus seabed lease @ $65m² = 42,900 $1,635,268
Adopt unimproved value $1,630,000
(B) Carpark –
|
Plus interest @ 7.87%
For 3 mths
Total cost of filling
= 1,325 =
$ 68,675
$ 220,125
Environmental studies
=
7,000
Professional fees (12%) = 8,922 $ 204,203 Less rates for 3 mths
=
600
Less land tax for 3 mths
Less interest on the land For 3 mths @ 7.87%
=
=
1,515
4,018
Unimproved value
=
$ 198,070
Adopt
$ 195,000
Conclusion:
(AV97-308) – Having considered all of the evidence I am persuaded that the appellant has partly proved his case. The determination of the Chief Executive is set aside, and the unimproved value of Lot 812 on RP 107934 and Lot 428 on WD5452 is determined at One million, six hundred and thirty thousand dollars ($1,630,000).
(AV97-244) – Having considered all of the evidence I am persuaded that the appellant has partly proved his case. The determination of the Chief Executive is set aside, and the unimproved value of Lot 315 on RP 95079 is determined at One hundred and ninety-five thousand dollars ($195,000).
(NG Divett)
Member of the Land Court
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