Flamingo Enterprises Pty Ltd v Chief Executive, Department of Natural Resources and Mines

[2001] QLC 49

LAND COURT

BRISBANE

31 MAY 2001

Re: Appeal against Annual Valuation

Valuation of Land Act 1944

Valuation Roll No.:    6768
  Local Government:    Maroochy Shire
  (AV99-484)

Flamingo Enterprises Pty Ltd

Chief Executive, Department of Natural Resources and Mines

(Hearing at Maroochydore)

D E C I S I O N

Background:

This matter relates to land at the corner of Kingsford Smith Parade and Sixth Avenue, Maroochydore, and described as Lots 22 to 24 on Plan M56710, Parish of Mooloolah. The subject land has an area of 1,821 m² and is on the south-eastern corner of the road intersection, approximately 120 metres from the ocean beach and is zoned "Comprehensive Development" under the Maroochy Shire Council (the Council) Town Plan of 14 December 1985, current at the date of valuation of 1 October 1998. The key issues are comparison of sales, the method of valuation, relativity, and the impact of existing uses.
On 29 March 1999 the Chief Executive issued a valuation of the subject land at $850,000. Following an objection by the appellant the Chief Executive confirmed the unimproved value at $850,000 on 19 July 1999. The appellant has now appealed that figure claiming the unimproved value should more properly be $250,000. A Court supervised preliminary conference on 16 December 1999 was unable to resolve the matter and a hearing was set down for 9 November 2000. At the request of the appellant that matter was adjourned until 27 February 2001.
At the hearing on 27 February 2001 the appellant was granted leave to amend his estimate of the unimproved value to $630,000. Douglas Wesley Stay, a director and building contractor, appeared and gave evidence for the appellant. Mr R Vize, Principal Legal Officer of Crown Law, appeared for the respondent, calling evidence from Maxwell John McLaren, the departmental registered valuer responsible for determining the valuation.
1. The Use of the Land -
The subject land is a level parcel fronting Kingsford Smith Parade and Sixth Avenue, both of which provide easy access to the site which is within easy walking access to the ocean surfing beach. The subject land has good views of the ocean from above a three-level building, across properties and esplanade trees behind the sand dunes. The land is located amongst high, medium and low-rise development varying up to 16 storeys in height. The subject land is currently used as a single level motel (The Beach Motor Inn), and there are low-rise motels and commercial uses in the area. All normal utility services are available.
The subject land is located within the Maroochydore Development Control Plan of 30 May 1987, which allows for high-rise unit development to 14 storeys in that locality. Subject to certain impact assessment and contributions to public amenity, Council may consent up to a height of 16 storeys at the relevant date of 1 October 1998. Mr McLaren advises that subsequent to the date of valuation, in June 1999, amendments to the Development Control Plan were advertised which now dictate that optimum development would be allowed to 10 storeys, with commercial development at ground level. However, it is agreed that at the date of valuation the maximum height was to 14 storeys. The new Town Plan was adopted in June 2000. The lands immediately to the east of the subject land and fronting Alexandra Parade have height restrictions to three storeys only.
Mr McLaren argues that the market for unit development lands tends to support that buyers pay more for corner sites because of the increased street frontage and outlook for the units. Mr Stay counters that conclusion by noting that the actual development of the larger footpaths and their maintenance are matters also considered by developers. Mr Stay is a very experienced developer with some 29 years in that business. He also notes that while the Council might encourage commercial development along Sixth Avenue, a prudent developer would not undertake such works unless he believes that the commercial shops would be viable. In his opinion that would not be so on the subject land.
Because of its size and corner location Mr McLaren argues that there is flexibility in design for units to be developed to maximise ocean views. He notes that the total number of storeys would vary upon the site depending upon the number of units per floor adopted, but only three of a probably 10 floors would not have ocean views. Mr McLaren notes that the plot ratio for the subject land was 1.335 under the old plan at the relevant date.
Mr Stay argues that setback restrictions along both road frontages is a limitation upon the subject land, not experienced on inside lots such as the adjoining Heritage Motor Inn site to the south. Mr Stay concedes that the optimum development of the subject land would be for redevelopment as high-rise units, in line with the moves now extending for lands near the beachfront from Mooloolaba to Maroochydore. On that basis he agrees that the value of the land would reflect the number of units and their likely price that could be developed upon the site.
However, Mr Stay argues that there is a current lease existing upon the subject land, which would impact its potential for redevelopment at the relevant date. That lease has a further period of eight years to run beyond 1 October 1998, and he estimates the buy back of that lease at about $395,000. He argues that to estimate the market value of the subject land as a development site, without making allowance for the rights of the lessee, would be inappropriate.
Mr Stay also argues that in his opinion he has concern whether any commercial activity on the ground floor would be viable. He concludes that current vacant shops in Mooloolaba indicate the difficulties with some commercial sites in that area, which is must more pedestrian oriented than Sixth Avenue, Maroochydore. On that basis he feels that there would be a higher return from units on the ground floor of the subject land.
However, Mr Stay concedes that a likely viable future solution for the subject land could be for a motel on the lower floors, with privately units on the upper floors where the ocean views occur. To support that conclusion Mr Stay notes that a shopping centre with about 30 shops on the corner site diagonally opposite the subject land (BUP100360) had failed, and was now being converted into home units.
Mr Stay also advises that when he developed the subject land about 10 years ago, he followed a "land banking" principle of developing a low-rise, easily replaceable structure. He had concluded even at that time that the eventual use of the subject land was likely to be for a high-rise unit type development. That is not inconsistent with Mr McLaren's view of its highest and best use, although Mr Stay believes that in order to achieve that use there must be some allowance for the current running lease. Mr Stay concedes that if a purchaser was buying the property as a vacant investment site, then a figure of about $1,000,000 would be about right.
While the current valuation was determined under the provisions of the old Town Plan, it had been Mr McLaren's understanding from Council officers that an owner had the right to seek approval under the old Town Plan during the transitional period of two years subsequent to June 2000. Mr McLaren understands that if the approval for the 14 storeys had been refused during this transitional period, then, to his understanding, the owner could seek compensation as a consequence of any downgrading of the former entitlement.
Mr Stay queries that understanding, arguing that compensation in such cases was no longer payable under the Integrated Planning Act 1997. Mr Stay understands that the transitional period under the old Town Plan only applies where Council had previously approved development plans prior to the coming into effect on the new town planning provisions.
2. The Method of Valuation -
Mr Stay basically relies upon direct comparisons with the sales provided by the respondent, and also relativities with surrounding parcels. However, in order to explain the significance of the existing running lease, he also provides a basic capitalisation approach. Mr Stay sees the capitalisation approach only as a check upon his direct comparison method.
The capitalisation approach adopts the current rental of the motel, which is then capitalised at 10%, and from which he deducts his estimate of the current value of the buildings, and also an allowance of $395,000 to buy back the existing lease. The buy-back figure represents the amount currently being listed for a similar lease on the adjoining Heritage Motor Inn.
However, Mr Stay concedes that he is unsure of the appropriate rate to capitalise a motel site, and his concluded unimproved rate for the subject land by that method was inconsistent with the figure of $630,000 he now contends for. On that basis I get no assistance from the capitalisation approach. Mr Vize also notes that the use of the capitalisation approach would appear to be inconsistent with the stated grounds in the Notice of Appeal.
Mr McLaren argues that it is not appropriate to make allowance for any impact of the current lease arrangement for the motel, as the subject land is freehold title. He concedes that had the land been leased from the State, or if determined under s.14(1) of the Valuation of Land Act1944 (the Act), then some consideration would have been made for the restriction upon the use of the land. However, he agrees that any developer buying the current property with the lease in place, would need to make allowance for the lease in the purchase price he offered for the land. But he argues that is not a matter for consideration when determining the unimproved value of the land, as the land must be valued as if it was vacant land under the Act.

3. Relativity -

Mr Stay seeks relativity on a rate per m² basis with the following parcels, all of which have similar zoning and building constraints:

Parcel	Description	Area	Rate per m²	Comparison
67-71 Sixth Avenue (Heritage Motor Inn)	Lots 19-21 on M56710	1,821 m²	$430	East side of Sixth Avenue
Sixth Avenue	Lot 18 on M56710	607 m²	$337	East side of Sixth Avenue
94 Sixth Avenue (Coachman's Court Motel)	Lot 1 on RP 173558	1,214 m²	$305	West side of Sixth Avenue
90 Sixth Avenue	Lots 22 and 23 on M56731	1,214 m²	$350	West side of Sixth Avenue
Sixth Avenue (Breakaway Units)	BUP13642	1,241 m²	$350	West side of Sixth Avenue

Mr Stay then averages those rates for parcels which he claims are all similar, concluding an average rate of $350 per m² for an area of the subject land of 1,821 m², or an unimproved value of $630,000 (rounded). He argues that those relativities bear no relationship to the applied unimproved value of the subject land at $470 per m².
Mr Stay in particular draws comparisons with the Heritage Motor Inn ($430 per m²), which he argues has the same plot ratio and height restrictions as the subject land, but does not suffer from similar building setback restrictions. As a consequence of those restrictions, Mr Stay notes that the Heritage Motor Inn has been able to achieve 20 units as a motel, while the subject land (Beach Motor Inn) has only been able to achieve 18 motel units. Mr Stay sees the Heritage Motor Inn site as similar or superior to the subject land for the above reasons.
In respect of increased views on the subject land, as a consequence of its corner location, Mr Stay argues that the Heritage Motor Inn ($780,000) would have similar views to the south towards the ocean near Alexandra Headlands, over the existing fairly new five-storey units on Lot 18, and the adjoining four-storey low-rise new units further to the south on BUP101495. Mr Stay also argues that the impact of parking by people visiting the beach is greater on the corner location than at the inside lot of the Heritage Motor Inn. He also notes that any design to seek to maximise views directly to the north-west would also need to consider that units with that aspect tend to be sold at lower prices than easterly facing units. Mr Stay argues that from his extensive experience as a developer, corner location for units is not a high priority.
In respect of location of motel or unit sites on the eastern or western side of Sixth Avenue, Mr Stay argues that travelling motorists tend to select the motels into which access is more direct when travelling northward. Sixth Avenue has a central median strip. Mr McLaren rejects that lots on the west of Sixth Avenue are more attractive, noting the more direct walking access to the beach from the eastern side, and also greater safety for children. Mr McLaren also notes that ocean views are less likely to be obstructed from lands to the east of Sixth Avenue.
Mr Stay concedes that views to the ocean from lots on the west side of Sixth Avenue will tend to be between high-rise buildings along the eastern side of Sixth Avenue. Mr Stay also notes that motel development has been concentrated in Sixth Avenue, and future redevelopment of the subject land was likely to maintain some type of motel presence, together with privately owned home units.
In respect of relativity with Lot 18 (Sixth Avenue) Mr McLaren notes that parcel is zoned "Comprehensive Development", but has a population density of 250 persons per ha, compared to 400 persons per ha for the subject land, because of its smaller size and lesser plot ratio. Mr McLaren also notes that the smaller size of several of the parcels noted on the west of Sixth Avenue, would all achieve lesser plot ratios than the subject land, and should therefore be valued at a lesser rate per m².
4. Comparison of Sales -
Mr Stay provides no separate sales evidence, relying also upon the respondent's sales. Mr McLaren provides the following sales:
·Sale 1 - (The Esplanade, Cotton Tree - now SP107293). This is a parcel of 1,864 m² zoned "Comprehensive Development" and located about 700 metres west of Maroochydore Beach and 350 metres west of Cotton Tree Shopping Centre. There are views to the mouth of the Maroochy River, and the sale is seen as overall superior to the subject land because of those views. The sale was capable of development to six storeys. The sale included old dwellings and a small shop which were subsequently demolished for redevelopment purposes.
The sale sold in July 1997 for $1,420,000, and was analysed at $1,420,000 ($762/m²) and applied at $1,200,000 ($645/m²).
·Sale 2 - (Cnr Fourth Avenue and Kingsford Smith Parade - Lots 1-4 on M56731). This is a 2,572 m² corner parcel zoned "Residential C" and located about 400 metres west of the Maroochydore Beach and 400 metres south of the Cotton Tree Shopping Centre. The sale overlooks a sports ground immediately to its north, but has no ocean views. The sale is limited to four-storey development under the Cotton Tree Development Control Plan No. 3, and is seen as far inferior to the subject land.
The sale sold in November 1997 for $875,000 and contained old cottages which have subsequently been demolished. The sale was analysed at $875,000 ($340/m²) and has been applied under s.17 of the Act as single unit residences.
·Sale 3 - (Sixth Avenue - Lot 311 on M5672). This is a 1,012 m² parcel zoned "Comprehensive Development" (DCP No. 1) and is located about 200 metres from Maroochydore Beach and 150 metres from Cotton Tree Shopping Centre. While the sale has similar zoning constraints as the subject land, its smaller size would limit developments to the plot ration of 1.04, thus limiting development to six floors. The site is also narrow in width, thus restricting direct aspects of units towards the ocean. The sale is seen as far inferior to the subject land.
The sale sold in December 1998 for $424,000 and contained an old dwelling which was subsequently removed. The sale was analysed at $424,000 ($419/m²), and has been applied at $380,000 ($376/m²).
·Sale 4 - (Sixth Avenue - Lot 418 on M5672). This is a 1,012 m² parcel zoned "Comprehensive Development" and located about 200 metres from Maroochydore Beach and 275 metres south of the Cotton Tree Shopping Centre. The sale was sold subject to impact assessment approval for a 10-storey development and a plot ratio of 1.9, and a minor setback relaxation under the 1985 transitional Town Plan.
The assessment approval in principle included allowances under the new Town Plan of June 2000, which recognised the major existing developments on either side of the sale. There were no approved development plans included in the sale. The sale was seen to be overall inferior to the subject land, but because of its assessment development approval was seen to be similar to the subject land for development potential purposes.
The sale sold in April 2000 for $575,000, and was analysed at $575,000 ($568/m²), and applied at $380,000 ($376/m²). However Mr McLaren argues that the application of that parcel will need to be reviewed on the basis of the impact assessment approval now extant.
Both parties agree that Sale 1 is superior to the subject land, Mr Stay arguing that Sale 1 reflects even a different market which is oriented towards permanent owner occupation, who either work locally or commute daily to Brisbane. By comparison he sees the subject land as less dependent upon permanent owner occupied type developments. For that reason he finds little comparison with the subject land. Mr Stay also agrees that Sale 2 is inferior to the subject land.
However, Mr Stay disagrees with the comparison with Sale 3, which he argues is probably a bit superior to the subject land, mainly because of its proximity to two key landmark buildings near Maroochydore Beach. From a commercial motel perspective, Mr Stay would anticipate some benefit from that proximity in respect of tourist demand during peak periods. He also notes that Sale 3 is only 50 metres from the main patrolled surfing beach at Maroochydore. However, he concedes that a maximum height of six storeys is a matter for consideration.
Mr Stay questions whether Sale 3 had a lesser plot ratio, as he argues that the new owners of Sale 3 were likely to have lodged a building application, seeking consent within the transitional period for the new Town Plan. If that had occurred prior to the formal adoption of the new Town Plan for Maroochy, then he would anticipate a similar number of floors, plot ratio and relative gross floor area (GFA) as the subject land. Mr Stay accepts that a subsequent building upon Sale 3 has been developed only to six floors, but argues that was most likely determined from an economic perspective, and not from a planning constraint. Mr Stay argues that building costs, including infrastructure services and lifts, tend to be relatively greater on smaller sites where the building footprint is more restricted.
Mr Stay also argues that Sale 4 falls within the same planning constraints as Sale 3 and the subject land, and has a similar area, and therefore should be capable of similar development height as the subject land. Mr McLaren advises that his Sale 4 had been subsequently developed under the new Town Plan of June 2000, and from Council records it now has approval to 10 storeys, with an increased plot ratio of 2.5. He compares that more relaxed control to the plot ratio for Sale 4 of 1.04 under the old Town Plan effective at the relevant date of 1 October 1998.
Mr McLaren further advises that since the adoption of AMCORD 95 the Council has been prepared to relax plot ratio levels subject to developers agreeing to enhance building design and also providing contributions to public amenities. Those variations could extend by 20% to 30% for plot ratios, and could impact all sales and the subject land. Mr McLaren argues that Sale 4, in his opinion, with the increased plot ratio of 1.9 achieved on that development, would be overall fairly comparable to the subject land, but it lacks the benefit of corner location, and also has greater restrictions on the number of units facing the ocean. For those reasons he sees Sale 4 as overall inferior to the subject land.

Mr Stay also queries the proximity of Sales 3 and 4, compared to the subject land, to the actual patrolled surfing areas at the Maroochy Surf Clubhouse, and the camping area to the south. He notes that those are more likely to be the destinations of surfers, and therefore the two sales are closer to the patrolled areas than the subject land. However, in the context of future development, I believe such minor differences would have little additional impact upon the comparisons.
Mr McLaren argues that the difference between his Sales 3 and 4 is that the latter demonstrates the variance in value of what otherwise would have been an inferior site, as a consequence of the higher plot ratio achieved as a result of relaxations under the new Town Plan from June 2000. Mr McLaren argues that demonstrates his argument that the impact of the higher plot ratios of the subject land should be reflected in its higher rate per m².
Decision:
(i) The Use of the Land -
I turn first to the use of the land and note that both parties agree that its highest and best use is for a development site, either as home units, or as some mixture of home units and commercial purposes on the lower levels. The maximising of ocean views to units is also agreed to extend only upwards from above level 3. For the purpose of this matter, at the relevant date, I accept that a maximum of 14 storeys could be considered, subject to the approved GFA. I also accept that, subsequent to the new Town Plan advertised in June 1999, the maximum height of any development was likely to be reduced to 10 storeys.
In respect of whether the market pays more for corner parcels for unit development purposes, I have Mr McLaren's opinion to that effect, but he supplies no sales evidence to support that conclusion. I have also Mr Stay's considered experience of 29 years as a developer that, in his opinion, corner location is not a major determinant of value for developers. However, I note that the major influence of corner location upon the design of units with ocean views, would appear to be the unobstructed views that could be taken advantage of along the public right of way of Kingsford Smith Parade, towards the beach. That would appear to provide some advantage, say, to the subject land compared to the adjoining inside lot of the Heritage Motor Inn.
However, such advantage must be conditioned by the impact of the building setbacks along both street frontages. That impact would, of course, be influenced by the designed building footprint for development, which in turn would result from the maximum number of floor levels and the approved GFA. On the evidence of Mr Stay, I can accept that any use for commercial purposes on the lower levels of the subject land at the relevant date was likely to be more oriented towards motel purposes than for shopping or restaurants.
In respect of the existence of the ongoing lease of the subject land for a further eight years, I note that s.14(1) of the Act relates only to land that is not freehold land, and has no relevance in this matter. However, I also note that in determining the unimproved value of land, where that land is improved, s.3(1) relevant states:
"3(1) For the purposes of this Act - 'unimproved value' of land means -
(b)in relation to improved land - the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist."

As the existing lease of the Beach Motor Inn relates principally to the improvements associated with that enterprise, I accept Mr McLaren's advice that it is not appropriate to make any allowance in the unimproved value of the subject land for that purpose.
That is not to say, however, that any prudent purchaser of the subject land at the relevant date would not take the existence of that lease into consideration when acquiring the property. That would merely be one of the considerations for redevelopment purposes, along with any costs of clearing the land banking type motel building in order to develop the new complex. But it is not a matter for consideration in the current matter.
In respect of any implications of possible compensation which might arise as a consequence of downgrading of rights under the new plan, and also the transitional period for the exercise of the higher uses under the old Town Plan, I am directed to s.5.4 .2, s.5.4.6, and s.6.1.2 of the Integrated Planning Act 1997. However, as actions in the current matter relate to the provisions of the old Town Plan at the relevant date, I make no further comment on those matters. I also note that the public display of the new Town Plan did not occur until June 1999, and directions in respect of making allowance for changes in the new Town Plan have no relevance in the current matter. (See JR & DM Stubberfield v. The Valuer-General (1988-89) 12 QLCR 328, per Carter J at 331).
(ii) Relativity -
In the matter of relativity comparisons I note that Mr Stay has sought to average the rates per m² for both lands to the east and the west of Sixth Avenue. While both sides of Sixth Avenue are zoned similar, and lots on both sides of the street have similar plot ratios and GFA's, the closer proximity to the beachfront, and direct unobstructed access to views of the ocean on the eastern side of Sixth Avenue are superior.
I accept that lands to the west of Sixth Avenue would have views between buildings to the east, and would have good views towards Alexandra Headlands. However, a key issue for landowners along the coastal street is proximity to and views of the ocean. The lands to the east of Sixth Avenue are superior in that respect.
In the matter then of averaging rates based upon dissimilar properties, I note that process has been rejected by the Courts. The matter of averaging of sales was addressed in Daandine Pastoral Company Pty Ltd v. Commissioner of Land Tax (1943) 7 The Valuer 299, at 305, where Williams J said in the High Court of Australia on 26 August 1943:
"This method of averaging is to my mind unsound. The prices obtained at comparable sales should not be aggregated and averaged, especially when the prices obtained on sales of small areas are dealt with in this way in order to obtain the valuer per acre of a large area. The only safe course is to compare each sale with the subject land separately. For instance, if three sales considered to be comparable of £3, £2/10/- and £2 per acre are average, the average value would be £2/10/- per acre. But if the subject land was closer in value to the land sold at £2 per acre than to the other lands, the average value would cause the subject land to be seriously over-valued."

That principle has been upheld by lesser courts on many occasions subsequently.

However, the use of averaging was seen as a useful check by Chamberlain J in Robson and Jarvis v. The Minister of Education (SA) (1964) 18 The Valuer 486, where he said at p.490:
"I recognise that the unscientific use of averages is a fruitful source of fallacy, but where there are a number of sales at about the same time of more or less identical blocks at somewhat different prices, an average may provide a useful check."

The possible use of aggregating in appropriate circumstances was also accepted in Fenton Nominees Pty Ltd v. The Valuer-General (1981-82) 47 LGRA 71, where Wells J said at p.80:
"There is no doubt that an average was struck, but, on the evidence before me, I am satisfied that that averaging was proper; Mr Quintrell was dealing, not with a number of purchases that were, in all respects, separate transactions, but with a series of purchases, each of which was viewed and treated by the purchaser as an integral part of the one operation of assembling a commercial site."

The principle of aggregating prices was rejected on appeal in that matter to the Full Court (1981-82) 47 LGRA 83, per King CJ at p.87. However, that was reversed by the High Court in 47 LGRA 95, where the Full Court said at p.99:
"We do not accept the argument that the manner in which the sites were 'assembled' by purchases of separate parcels so as to make up the totality of the relevant commercial sites led to the developers paying a special price. The primary judge was right in rejecting this argument. In this respect it is of paramount importance that the evidence assists in establishing what commercial developers were prepared to pay for the vacant land comprised in the overall sites which they assembled." (See also (1981-82) 150 CLR 160, at 167.)

However, Fenton Nominees Pty Ltd can be distinguished in the current matter as the averaging of rates per m² for purposes of determining an appropriate rate for the subject land involves separate disparate parcels with differing attributes and features. That distinction was also apparent in Robson and Jarvis (supra). On balance, I believe the adoption of an average rate per m² adopted from the relativity comparisons has no sound basis, and relativity comparisons should proceed upon a direct comparison between parcels.
Adopting then the comparisons provided, I find that the better exposure to ocean views, and closer proximity to the beachfront would support that the subject land is superior to 90 Sixth Avenue ($350/m²), and Breakaway Units ($350/m²). The lesser rate for 94 Sixth Avenue ($305/m²) was likely to reflect a narrower width towards the ocean of that parcel, although it does have a second frontage to Fifth Avenue.
If I then compare the subject land to Lot 18 Sixth Avenue, I find the smaller area of that parcel would tend to limit its maximum development to 14 storeys, and that parcel is clearly inferior to the subject land. The applied rate of $337/m² is consistent with that finding.
The most useful relativity comparison is with the adjoining parcel of the Heritage Motor Inn at $430/m².
(iii) Comparison of Sales -
If I consider the comparison with the supplied sales I find:

Sale	Area	Analysed Rate Per m²	Comparison
1	1,864 m²	$762	Superior
2	2,572 m²	$340	Inferior
3	1,112 m²	$419	Far Inferior (Mr McLaren) Slightly superior (Mr Stay)
4	1,012 m²	$568	Late sale similar for development
Subject	1,821 m²	$470

The analysed rates for Sales 1 and 2 provide upper and lower limits for comparisons, and I believe the key sale is Sale 3, with some consideration of Sale 4 for the potential rise in value attributed to a higher plot ratio or GFA. Sale 4 provides only limited assistance, as the sale is a late sale well after the relevant date (18 months), and there is no evidence whether the market has changed during that period.
In considering Sale 3 I believe the larger size and width of both the subject land and the adjoining Heritage Motor Inn, would support the sale as inferior to both of those properties. However, I accept that Sale 3 is closer to the patrolled surfing areas. Because of his wide experience in property and motel development, I accept Mr Stay's view that Sale 3 would also benefit from the adjoining prestigious buildings. However, that may well change with the future development of the subject land and its adjoining neighbour. On balance I accept that Sale 3, which has been applied at $376/m², is inferior to the subject land.
If I consider then the relativity check with the adjoining Heritage Motor Inn ($430/m²), I am reminded that that unimproved value is deemed to be correct under s.33 of the Act unless successfully challenged. As noted, both the Heritage Motor Inn site and the subject land have similar exposure to ocean views above level three over the adjoining buildings to the east. The only advantage enjoyed by the subject land could be from any commercial (shops) potential at some future time, any increase of access potential for vehicles because of its corner location, plus any additional ocean glimpses that might be available along Kingsford Smith Parade. Against that is to be weighed the additional setback requirements along Kingsford Smith Parade. On balance, I believe the Heritage Motor Inn is slightly inferior to the subject land.
The question then becomes by how much is the subject land superior to the Heritage Motor Inn site? I note that historically from 1989 to 1995 the differential between the parcels was about $20,000 (6.9%). Since 1996 the differential has increased to $70,000 (9%), although Mr McLaren was unable to clarify why the differential was increased. Allowing for the slight differences between the parcels, I believe the original differential reflects an appropriate allowance, and I will allow $830,000 for the subject land.
Conclusion:
Having considered the whole of the evidence I am persuaded that the appellant has partly proved his case. The appeal is upheld, the unimproved value as determined by the Chief Executive is set aside, and the unimproved value of Lots 22 to 24 on M56710 is determined at Eight Hundred and Thirty Thousand Dollars ($830,000).

NG DIVETT
MEMBER OF THE LAND COURT

[2001] QLC 49

31 May 2001