Glensan Pty Ltd v Chief Executive, Department of Natural Resources and Mines - [2002] QLC 17

LAND COURT

BRISBANE

28 February 2002

Re: Appeal against annual valuation

Valuation of Land Act 1944
  Property ID No:        1110606
  Local Government:    BCC-South Brisbane
  (AV1999-0689)

Glensan Pty Ltd

Chief Executive, Department of Natural Resources and Mines

J U D G M E N T

Background:

This matter relates to land at the corner of Melbourne and Manning Streets, South Brisbane and described as Lots 1 to 3 on RP 1430, Parish of South Brisbane. The subject land has an area of 870 m² and has good access to both Melbourne and Manning Streets, both of which are bitumen sealed with concrete kerbing and channelling. The subject land is rectangular in shape, above street level, well drained and is a level site. All normal utility services are available. The land is zoned “Special Development” under the Town Plan of the Brisbane City Council of 1987, effective at the date of valuation of 1 October 1998. The key issues are the use of the land, the method of valuation, comparison of sales and impact of heritage listing.
On 8 March 1999 the Chief Executive issued a valuation of the subject land at $500,000. Following an objection the Chief Executive confirmed that figure on 29 June 1999. The appellant has now appealed claiming the unimproved value should more properly be $380,000.
Following an interlocutory hearing on 28 March 2000, jurisdiction to hear the matter was determined; and an adjourned court supervised preliminary conference was held on 22 September 2000. At a hearing on 14 December 2000 the matter was further adjourned until the final hearing on 21 November 2001. Unfortunately due to apparent communication problems between the parties, there was no further direct face-to-face communication between the parties in an attempt to resolve the issue.
At the hearing on 21 November 2001 it became clear that there were two subsequent objections against succeeding valuations at 1 October 1999 and 1 October 2000, which are continuing matters of disagreement between the parties. The details of those subsequent matters are not before this Court, and are not matters for consideration. However, the outcome of the current matter may influence those subsequent objections. This historical background of ongoing disagreement clearly has led to the current level of mistrust between the parties.
Philip Stewart Churven appeared and gave evidence on behalf of the appellant. Mr D Grealy, Counsel of Crown Law, appeared for the respondent, calling evidence from Arend Boudewyn Van Hees, the departmental registered valuer now accepting responsibility for the valuation, which was initially determined by another departmental valuer.
At the request of the parties an inspection was undertaken.
The evidence:
The use of the land -
The subject land is agreed to contain an old three-storey building, and an adjoining side building, both of which are listed as Historically Significant. The land is officially listed as Property 78 under the existing Development Control Plan of the Brisbane Town Plan. Mr Van Hees has referred to old departmental records of the building prepared in 1951 (Exhibit 2), which record the area of the main building at 918 m². The adjoining side building was determined to occupy a further 81 m², giving a total gross floor area (GFA) of 999 m².
The departmental record confirms Mr Churven’s advice that the internal walls are steel-framed encased in concrete. For that reason, together with the Heritage Listing restriction, Mr Churven argues that any modification of internal rooms would be perceived in the market place to be a disability for normal commercial activities. He argues such restrictions would reduce the attractiveness for normal leasing purposes.
Mr Churven concedes that the subject building is leased at a commercial rate for that locality. However he argues that, in his opinion, that commercial return reflects the special nature of the business activities of the current tenant. There had been an eight year lease ongoing at the date of valuation in October 1998. However that has since expired, and the tenancy now continues on a month-to-month basis. Current negotiations between the tenant and the adjoining business client are continuing. Mr Churven feels that the likelihood of successfully negotiating a new lease rests upon those third party arrangements.
In respect of the adjoining side building fronting Manning Street, there is considerable difference between the parties. Mr Van Hees sees that building as having some useful GFA, and he has therefore included that 81 m² in his assessment of the impact upon useable floor space. Mr Van Hees had not personally inspected the interior of the two buildings, but notes that the side building may have some use as a commercial activity such as a restaurant. That conclusion may have been influenced by the sign “Restaurant” over the front door, suggesting perhaps such a use in the past. However the front part of that building is currently only used for the storage of old fixtures, and is apparently not actively used.
Mr Churven confirms that the front part of the side building is for non-active storage, while the rear part, and a small attic type first floor are used as work rooms and maintenance areas by the adjoining business client of the current tenant. There is no charge made for the use of that side building by either the current tenant of the subject land, or their business client.
The use of the side building therefore provides little contribution to the rental return, and I would agree with Mr Churven that any possible rental potential might be of the order of $40 to $50 per square metre. An inspection of the side building does not support Mr Churven’s estimate of the total floor space at up to 200 m², which was clearly based upon his little direct dealing with those areas. On the evidence I believe that Mr Van Hees’ estimate of a further 81 m² GFA would be a reasonable conclusion for the side building.
The main building was originally constructed as a Hoyts cinema building, and has features which tend to identify it as a single tenant business. Access to the two upper floors are via narrow stairs, and the ceiling heights of the ground and first floors are 3.5 metres and 3.1 metres respectively. The upper third floor is currently unused and unmaintained, but was apparently built for on-site residential purposes. In its current condition the third floor provides little attraction, but could be used as suggested by Mr Churven for staff rooms or on-site residence associated with a single tenant. Mr Churven argues that the third floor area provides no contribution to the current rent.
Because of its heritage restrictions, and the unusual design and construction of the building, Mr Churven argues that the impact upon potential commercial returns to an owner, are matters that should be considered in determining the unimproved value of the subject land. He also notes that vehicle parking is currently restricted to two in-line parking places in the laneway between the two buildings on-site. He notes also fire safety requirements may be a further restriction upon how those in-line parking spaces may be utilised.
Mr Churven argues that such issues would be of concern to a prospective owner or tenant. However, he concedes, that certain types of commercial activity may be interested in leasing the building, because of its character and exposure to busy Melbourne Street. Mr Churven argues that the existing business arrangements between the current tenant and the special client neighbour, is not a full measure of the economic viability of the existing protected building.
Mr Van Hees argues that depending upon the type of tenant occupying the main building, the tenant may have some use for both or either the upper third floor, or the side building. On that basis he believes those areas should be included in the available GFA. Mr Van Hees also notes that it is fairly common today for people renting City residential properties to use part of those premises, perhaps illegally, as offices. On that basis he sees little restriction on assessing the full GFA as noted at 999 m². However he concedes that perhaps the side building and the upper third floor could be rented at lesser rates than the main building.
In respect of the maximum GFA under the Town Plan the subject land, which is in precinct 8 of the South Brisbane Development Control Plan, may be developed to a maximum plot ratio of 1.5 times the site area. On that basis the allowable GFA would be 870 m² by 1.5 or 1,305 m². The estimated current GFA is 999 m² or 76.5 percent of the total allowable GFA.
Mr Van Hees argues that the commercial and retail areas of West End are experiencing high demands for suitable land along Boundary Street. He argues that those pressures are now extending along Melbourne Street, as demonstrated by restaurants and take-away food outlets near Edmondstone Street. Mr Churven concedes those retail outlets in Melbourne Street, but argues that the retail activities do not extend at present beyond Edmondstone Street. He argues that the land use further east of Edmondstone Street is still commercial activities, and prevailing rents in those areas are much lower. He notes that the current rent for the two floors of the subject land is about $135 per m²; while rents in Boundary Street, West End, are between $480 per m² to $600 per m².
The method of valuation -
In support of his estimate of the unimproved value of the subject land, Mr Churven argues that the unimproved value of $500,000 as determined by the respondent is inconsistent with the valuation obtained by another registered valuer about 1998. The subject land had been valued for finance security purposes at $900,000 based upon the then existing lease rental. Mr Churven argues that the land component of that security valuation, from his memory of the details, represented about $400,000. However neither a written report, or the valuer, was available for cross-examination.
Mr Churven further argues that if due allowance is made for the lesser commercial attractiveness of the storage areas of the side building, and also the upper third floor in the main building, then, in his opinion, the effective GFA would be only about 50 percent of the maximum GFA of the site. Based upon that restricted GFA level, and comparing then with the full development potential of the sales evidence supplied by Mr Van Hees, Mr Churven argues that a land value perhaps even less than $380,000 might be appropriate.
In explaining his method of valuation Mr Van Hees advises that he first compared the subject land with sales of comparable vacant lands, and then made an allowance for the impact of the Heritage Listing on the land. Based upon his estimate of the useable GFA of the existing building, and comparing that to the maximum GFA allowable under the Town Plan, Mr Van Hees concludes a reduction of 23.5 percent to allow for the Heritage impacts upon the site.
Mr Van Hees rejects the top-down approach of capitalising rents seeing it as a more difficult exercise, and less conclusive than the comparable vacant land sales approach. Mr Van Hees also rejects the valuation for finance security purposes, as he notes that such valuations tend to be very conservative in order to allow a margin of security for the financial institution providing the security.
Mr Churven argues that from a long term investment perspective, in the current speculative trend in areas such as West End, where the property market is overheating, the returns on investments reflect very low rental values. Mr Van Hees agrees with that conclusion, but notes that the best guide for the value of land is to be found in sales in the immediate locality of the land to be valued. He agrees that current rental returns on rapidly increasing land prices in West End (up to 40 percent annually), result in very low percentage rental values. However he argues that the current property market in that area is seeking large capital gains, rather than rental returns. That of course raises the issue of whether the purchasers can be defined as prudent in such transactions, and whether both capital growth and economic returns are both features of the market for lands.
Comparison of sales
Mr Churven provides no sales evidence to support his estimate of the unimproved value of the subject land. Mr Van Hees provides the following sales:

Sale 1 – (45 Cordelia Street, South Brisbane – Lot 65 on B 359). This is a 911 m² inside parcel zoned Commercial under the South Brisbane Commercial Precinct 8, with a plot ratio of 1.5, and located about 150 metres east of the subject land. Access is via one-way traffic in Cordelia Street, which is seen as an inferior location to the subject land. The sale is seen as inferior to the subject land due to location, one-way access and no corner influence.

The sale sold in April 1998 for $550,000, which was analysed at $560,000 ($615 per m²) after demolition of an old dwelling. The sale was applied at $480,000 ($527 per m² - 86 percent).

Sale 2 – (26 Russell Street, South Brisbane – Lot 92 on B 3137). This is a 911 m² inside parcel, zoned Commercial under the South Brisbane Commercial Precinct 8, with a plot ratio of 1.5, and located about250 metres south-east of the subject land The sale is slightly larger, but is seen as inferior to the subject land due to an inferior location and also no corner influence. The sale occurred after the date of valuation, but prior to the date of issue of the valuation on 8 March 1999.

The sale sold in January 1999 for $450,000, was analysed at $450,000 ($494 per m²), and applied at $425,000 ($467 per m² - 94 percent).

Sale 3 – (81 Boundary Street, South Brisbane – Lot 1 on RP 53570). This is a 556 m² corner parcel, zoned Business under the West End Shopping Centre Precinct 7, and located about 200 metres south-west of the subject land. Access is via the round-about at the intersection of Boundary and Melbourne Streets, and the site was previously developed as a service station which was decontaminated and demolished. The sale is seen as superior due to its location close to the retail centre of West End, and its exposure.

The sale sold in September 1997 for $660,000, but the sale was not settled until 27 February 1998. The sale was analysed at $680,000 ($1,223 per m², but was only applied at 1 October 1998 at $305,000 ($549 per m² - 45 percent), as the sale was not considered in the market analysis. Subsequently at 1 October 1999, the sale has been applied at a higher level.

Mr Van Hees argues that had Sale 3 been fully analysed at 1 October 1998, it would have been applied at $1100 per m², not the $549 per m² that had been applied at that date. Mr Van Hees explains that during 1998 there had been major increases in the market in West End, and some properties, including Sale 3, had been overlooked and the unimproved values had not been increased in accordance with the market.
Mr Churven is familiar with the general area and sales properties, and argues that if the subject land had not been Heritage listed, then he would agree with a rate of about $550 per m² with being appropriate for the subject land. He makes that conclusion adopting Mr Van Hees’ applied rates of $520 per m² (Sale 1), $467 per m² (Sale 2), and $549 per m² (Sale 3). He argues that none of those sales support a rate of $750 per m² for the subject land. Mr Churven notes that none of Mr Van Hees’ sales are Heritage listed and he has no problem with their analysis.
Mr Churven agrees that both Sales 3 and the subject land have good exposure, and also corner access. However he sees those features as much more important for the retailing functions of Sale 3, than for the commercial activities of the subject land. Mr Churven also does not see the one-way street access at Sale 1 in Cordelia Street as a particular disadvantage. He notes that turning in Melbourne Street is also controlled by double lines, which would have a similar impact for access as in Cordelia Street. Mr Van Hees disagrees noting that, in his opinion, Melbourne Street is far superior to Cordelia Street for access and for exposure purposes.
In respect of the maximum plot ratio of Sales 1, 2 and the subject land, each of those has a maximum allowable GFA of 1.5 times the site area. Sale 3 by comparison has a maximum plot ratio of 1, with a further 0.5 if developed for residential purposes. The Commonwealth Bank development subsequently upon Sale 3 has only utilised the maximum factor of 1.0. Mr Van Hees notes that the increased GFA allowable, with the consent of Council, where residential occurs on the upper levels, has been extended down Boundary Street in West End. Mr Van Hees sees that as an indication that purchasers are prepared to pay more for good locations in Melbourne Street. Mr Van Hees notes that the Commonwealth Bank, with 100 percent site coverage, has subsequently recently been on-sold as a developed site for $2,400,000, demonstrating the healthy state of the property market in that area.
Mr Churven rejects that a similar pattern of high values extends along Melbourne Street to the subject land, noting that the West End area is really quite distinctive from the commercial areas of South Brisbane. He argues that West End is perhaps second only to the Mall in Queen Street, where there is a large drop-off in land values as you move two blocks away from the Mall area. He believes that a similar pattern would exist in distance from the West End retail area along Boundary Street.
While he provides no further evidence of vacant sales to support his estimate of the relative level of value of the subject land, Mr Van Hees advises that he did investigate the trends from sales of improved properties in the area. He argues that those sales of improved properties revealed a pattern that people pay more for a building in Melbourne Street than they do for a similar building in Cordelia Street. Based upon that personal judgment as a valuer, Mr Van Hees has weighted the differences between Sales 1 and 2 and Sale 3, and the subject land. Mr Churven sees that Sale 1 provides the best comparison, as it is much nearer to the use and rental values of the subject lands, in the absence of any Heritage limitation.
The impact of Heritage listing -
In applying a reduction (23.5 percent) for the impact of the Heritage Listing, Mr Van Hees has sought guidance based upon the actual GFA of the Heritage building (999 m²), compared to the maximum GFA had the land been vacant (1,305 m²). Based upon his comparisons with his sales Mr Van Hees concludes a rate of $750 per m² for the subject land without any Heritage impacts, adopting a rate of $575 per m² after deductions for Heritage restraints.
Mr Churven has no problems with that approach, but argues that the adopted rates are inappropriate. He argues that a rate of $575 per m² would be appropriate before Heritage listing, and any impact of Heritage restrictions should allow for the lesser use of both the side building and the inferior third level space.
Mr Van Hees argues that the current level of maintenance of the side building and the third floor are really matters for the existing owner or the tenant, and do not necessarily reflect any lack of market potential for those areas. He argues that the subject building is perhaps the most outstanding building in Melbourne Street. Mr Churven argues that because of its design structure and the heritage restrictions on changing the building, the leasability for normal commercial purposes must be reduced from a valuation perspective.
Decision:

The use of the land -

On the evidence and the inspection, it is clear that the building upon the subject land has a level of uniqueness, which would mitigate its use for general commercial type activities. While the current leasing arrangement at the date of valuation of 1 October 1998 was agreed to reflect normal market returns, subsequent events would support the appellant’s concerns that a “special” relationship exists between the tenant and their adjoining business associate. I believe that the nature of the existing Heritage listed property would have a significant impact upon its commercial application, and hence its value.

In respect of the total GFA applicable to the existing buildings, I accept Mr Van Hees’ estimate of 918 m² for the main building, and a further 81 m² for the side building. However, while the total floor area for the main building was 918 m², there is no separate quantification of the third level floor space which was constructed as a “penthouse” on the roof. That may well have been the intentions in 1951, but that upper area displays certain disabilities to be compared on the basis of similar commercial values as the two lower floor levels. I suggest its current state of disrepair supports the difficulties of effectively utilising that extra space.
The current tenant has supplied a roller door division at the Melbourne Street entrance, as a means of separating the two upper floors from the ground floor. However the narrow winding staircase between level two and the roof areas would tend to support the view that the roof areas are really of some lesser value than the two lower floors. Generally I would agree with the appellant that the building is designed for single tenant occupancy. On that basis I believe that the adoption of 918 m² of total GFA for the main building is really an overstatement of its usability. The fact that the current lease only covers the two lower floors demonstrates that point. Because of its Heritage nature the construction of any separate entrance to the upper roof area, only possible into the laneway between the two existing buildings, would most likely not receive approval from the Environmental Protection authority.
In respect of the GFA of the side building, I believe that has only storage type use at present, and I accept Mr Churven’s advice of a rate of say $50 per m² compared to $135 per m² for the balance of the area. On that basis, if I convert that into a general value for the total GFA of the combined buildings, I could conclude a rate of 50 divided by 135, and multiplied by 81 m², giving an additional floor area for the side building of 30 m².
Adding that to the agreed floor area of the main building (918 m²) gives a total usable GFA of 948 m². However as noted I believe that is an overstatement of the potential of the building, and I will accept an effective GFA of 940 m². The fact that the side building is not charged for does not mean that it does not have any residual value for the tenant, perhaps as an offset for some purpose to its adjoining business associate.
In respect of any potential use of either premises for a retail purpose such as a restaurant, I note that under section 10.1 of the Town Plan such use could be approved subject to the consent of the Council. Part of the consent approval by the Council was likely to require adequate onsite parking arrangements, although that could be relaxed if adequate onstreet is available nearby. A further relaxation could be allowed because of the Heritage nature of the subject buildings. However on the evidence I agree with the appellant that current trends in Melbourne Street indicate that it may be premature to consider such further use at this time.

The method of valuation -

In the absence of any details of the valuation for security purposes, I get little assistance from that estimate of the value of the land. While such an approach capitalises the annual rental return then extant under the lease, there is no evidence of the appropriate rental capitalisation rate applied, and its relevance to the market place. I also note Mr Van Hees’ opinion that a top-down approach is dependent upon appropriate capitalisation rates, a matter noted with some caution by the Courts.
I note for example that the capitalisation of profits was rejected by this Court in RRM King & Anor v Valuer-General (1969) 36 CLLR 195, at page 199. In that matter the learned Member referred to criticism of such an approach by the High Court in Jowett v The Federal Commissioner of Taxation (1926) 38 CLR 325, where Rich J said at page 328:
“If one capitalizes the profits of the operations carried on upon the land, and then makes certain deductions, the residual value is the capital value of the operations and not the unimproved value. In the operations are involved personal exertion, experience and skill, and no allowance is made for the value of these matters. If these were separated out, the capitalization process might more nearly approximate to the unimproved value. In setting to work to capitalize what can be made out of the land, you overlook the fact that the problem set is to ascertain the realisation value or how much capital is locked up in the land.”

That principle was also followed by this Court in Efstathis v Commissioner for Railways (1958) 27 CLLR 52, where the President said at page 54:
“The Court also rejected the method of capitalisation of rental profits which had been used by one of the claimants’ valuers. This method occasionally could be used to good effect and produce an equitable result, but should never be used where there are sales of comparable lands and improvements in the neighbourhood.”

While the capitalisation of net rentals is an approach often adopted where the matter goes directly to the earning capacity of an investment property; it has limitations where the improvements are not suited to the site. In such matters the earning capacity may be something less than its highest and best use. Where unimproved value is to be determined, the land is to be valued as if any improvements upon it did not exist; and the connection with the earning capacity of the site is thus a matter difficult to quantify. While in the current matter the Heritage nature of the buildings is a matter that must be allowed for, its less than optimum development of the site precludes the capitalisation approach as a reliable measure of the value of the land.
In adopting his approach of comparing sales of vacant or lightly improved lands, Mr Van Hees has followed precedents favoured by courts at all levels. That was followed in NR and PG Tow v Valuer-General (1978) 5 QLCR 378 where the Land Appeal Court said at page 381:
“The whole of the valuation process must be based on this hypothesis. Courts of the highest authority have laid down that the best test of value is to be found in the sales of comparable properties, preferably unimproved, on the open market round about the relevant date of valuation and between prudent and willing, but not over-anxious parties.”

That was also followed in R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13, at page 17; and was perhaps most clearly explained in PH Clough v Valuer-General (1981-82) 8 QLCR 70, where the Land Appeal Court said at page 76:
“It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value. The reason is obvious. In applying such sales there is no room for error in analyzing the value of improvements.”

Comparison of sales -

In drawing comparisons with his sales Mr Van Hees has adopted two sales in the Commercial Precinct 8 (Sales 1 and 2), and a third sale in the adjoining West End Shopping Centre Precinct 7 (Sale 3). While both of those Precincts allow development to a maximum plot ratio of 1.5 to 1; the area of Sale 3 can only achieve that figure if it includes a residential component of not less than 0.5 times the area of the site. On that basis the planning regime would appear to favour the higher allowable density of Commercial Precinct 8, if considered for commercial purposes only. It is noted that similar onside parking requirements and relaxations occur in those precincts.
However the more highly favoured, and valued, properties in Precinct 7, as demonstrated by Sale 3, carry a premium of about 100 percent over lands to the north-east in Precinct 8. The decision by the developer of the subsequent Commonwealth Bank not to avail himself of the additional residential component of 0.5 of the site area, indicates that the retail market in that locality is quite different to the commercial areas of Sales 1 and 2.
The question then to be answered is where does the demand for the different land uses extend along Melbourne Street? Mr Van Hees argues that the market for retail purposes extends to Manning Street; while Mr Churven claims it currently changes at Edmondstone Street. On the evidence I believe that some existing retail outlets at the corner of Edmondstone Street and Melbourne Street demonstrate that retail at least extends to where Mr Churven has conceded. However there was nothing to support that retail now extends to Manning Street, and I will accept Edmondstone Street as the most likely extension at the date of valuation.
In drawing comparisons then with the sales, I believe the most comparable sale is Sale 1 at an analysed rate of $615 per m². The location of Sale 2 in Russell Street is inferior to Sale 1, as demonstrated by its inferior analysed rate of $494 per m² for a similar sized parcel. I also note that in applying those two sales, compared to their analysed market sale price, Mr Van Hees has adopted a conservative application for Sale 1 (86 percent) and Sale 2 (94 percent).
If I then consider his Sale 3 I find that was initially applied by Mr Van Hees at only 45 percent of the analysed value. Now Mr Churven is entitled to claim that section 33 of the Valuation of Land Act 1944 dictates that applied values for the Chief Executive may be deemed to be correct until proved to be otherwise. However the application of that sale at only 45 percent of its analysed value indicates that either an error has been made in its previous application, or the sale in some way was inconsistent with the market. Mr Van Hees’ explanation of the history of that property supports the former conclusion, and I will accept that Sale 3 should have been applied at $1100 per m², or 90 percent of the analysed sale price.
The test of market site value of the subject land, without any impact of Heritage listing, rests between Sale 1 ($615 per m²) and Sale 3 ($1,223 per m²). Because of the large difference in rates between the West End shopping centre retail areas and the South Brisbane commercial areas (about 100 percent), I agree with Mr Churven that it is not appropriate to merely apply a pro rata type adjustment for the geographical location of the subject land compared to Sales 1 and 3 respectively. While the subject land is located approximately equal distance from those two sales, its relative value must be nearer to the rate for Sale 1.
I would agree with Mr Van Hees that some allowance should be made for the better exposure and corner location of the subject land compared to Sale 1. On balance I believe a market site rate of about $750 per m² could be appropriate for the subject land, free of any Heritage disabilities.
However I also note that in applying both Sales 1 and 3 Mr Van Hees has applied conservative applications of those analysed prices in order to reflect their relationship to the normal market trend in those areas. On that basis he has applied rates at Sale 1 at $527 per m² (86 percent) and at Sale 3 at $1100 per m² (90 percent). On that basis I believe that a similar conservative approach should be applied to the subject land, and a figure of 90 percent of $750 per m² (or $675 per m²) would be appropriate for the site free of any Heritage impacts.

The impact of Heritage listing -

If I turn then to the Heritage impacts, I agree that there is no fixed approach by which Heritage impacts may be determined. I also accept that Mr Van Hees’ approach comparing the existing GFA to the maximum GFA possible under such zoning is a reasonable approach to determining the Heritage impact upon the unimproved value of the land. The potential range of disability reductions for Heritage listings was explored in the matter of Marvella Pty Ltd v Chief Executive, Department of Natural Resources and Mines (AV2000-242 and others), 11 December 2001, unreported. In that matter it was noted that Heritage impacts may vary from site to site, but that generally speaking it does impact upon the valuation.
In the current matter I note that the usable GFA of the subject land represents 940 m² or 72 percent of the maximal allowable GFA of 1,305 m². If I then reduce the unencumbered value of $675 per m² by 28 percent, I could conclude a rate of $486 per m² for 870 m² or $422,820 (say $425,000).
Conclusion:
Having considered the whole of the evidence I am persuaded that the appellant has partly proved his case. The valuation of the Chief Executive is set aside, and the unimproved value of Lots 1 to 3 on RP 1430 is determined at Four Hundred and Twenty-five Thousand Dollars ($425,000).

NG DIVETT
MEMBER OF THE LAND COURT