Ferreira v Chief Executive, Department of Natural Resources and Mines

Ms Watson and Mr Ferreira, lessees of Special Lease No. 9/36983, sought to convert their lease to freehold tenure and appealed the Department of Natural Resources and Mines' decision on the unimproved value of the land. The land, located in Baker's Road, Mt Molloy, was zoned "Rural A" and had been used as a rubbish dump, leading to degradation and potential contamination. The Department initially valued the land at $25,000, which was reduced to $22,500 after an internal review. The lessees contested this valuation, arguing it was too high and did not adequately account for the land's degradation and potential contamination. They also disputed the cost of servicing the land with electricity and water, the proximity to a transfer station, and the impact of contamination on groundwater and flooding susceptibility.

The court considered the meaning of "unimproved value" as defined in s.434 of the Land Act 1994, which refers to the value of land in its natural state, without any improvements. The court was required to decide whether the Department's valuation accurately reflected the unimproved value of the land, taking into account the factors raised by the lessees. The court also had to consider the impact of the land's degradation and potential contamination on its market value.

The court found that the Department's valuation was too high and did not adequately account for the land's degradation and potential contamination. The court accepted that the land's condition would result in a diminution in value of around 30%, and therefore determined the unimproved value of the land to be $18,000. The court also found that the lessees should not be required to pay for the cost of surveying the land, as this was a condition of government policy that they would have been aware of at the time of their conversion application.

The court set aside the Department's review decision and determined the unimproved value for conversion purposes to be $18,000. The court's decision was based on the conditions of offer contained in correspondence from the Department of Natural Resources to the lessees dated 1 November 1999, varied in accordance with this determination.