JJC Nominees Pty Ltd v Chief Executive, Department of Lands

[1995] QLC 123

[1995] QLC 123

 

  LAND COURT

BRISBANE

12 OCTOBER 1995

Re:     AV94-508 -
  An appeal against an unimproved valuation -
Valuation of Land Act
  Local Government:           Whitsunday

JJC Nominees Pty Ltd
  v.
  Chief Executive, Department of Lands

(Hearing at Proserpine)

D E C I S I O N

The appellant company owns land situated in Jubilee Pocket Road, Jubilee, about 3 kilometres south-east of the Airlie Beach Post Office.  The land is described as Lot 62 on RP 808879, Parish of Conway, and contains an area of 58.75 hectares.  The land is vacant and zoned "Rural A (Pastoral)".
           As at 30th June, 1993, the Department of Lands valued the land unimproved in the amount of $370,000.  In the Notice of Appeal the estimate of value is $200,000.
           Mr B. Conroy, registered valuer, acted as agent for the appellant company.  In his opinion, the correct valuation of the land was a rounded $220,000.  He considered that, of the total area, about 60% had potential for medium term subdivision as residential lots.  This area, in the north-eastern section and on the road frontage, comprised easily undulating country with no particular features or views and was broken by a gully system.  The balance 40% was too steep for residential subdivision.  Mr Conroy saw that balance area at best as having some potential for subdivision into larger lots although he felt that it could be required to be set aside for park purposes as a condition of subdivision of the better quality land.  However, with the quantity of more suitable land available in Jubilee Pocket for residential subdivision, Mr Conroy saw the subject land as nothing more than a holding proposition for up to five years.
           Mr Conroy had considered four sales in his valuation exercise but none of them were seen as being directly comparable.  Two of the sales were also considered by the Department of Lands and I will refer to them later.  It is clear that Mr Conroy's primary consideration was that, in his opinion, the Department's overall valuation could not have been achieved in the marketplace at the relevant date.  In his opinion the sales of in globo lands showed that better investments were available at the time than that offered by the subject property.
           Mr Conroy's valuation was calculated as follows:

35.25 ha @ $5,000 a ha  $176,250

23.5 ha @ $2,000 a ha   $47,000

$223,250

Adopt  $220,000
Mr S.J. Whitfield, registered valuer, was responsible for the valuation appealed against.  He was a little more conservative than was Mr Conroy in his appreciation of the qualities of the land.  He felt that about half of the total area was suitable for residential development, although he saw the potential tending more towards subdivision into larger home sites.  He agreed that the potential was not immediate and estimated a development commencing in about three to five years' time from the relevant date.  He saw the balance rougher section as being complementary to the development of the better quality land, in that it provided opportunity for negotiation of Council requirements.
           Mr Whitfield's valuation was as follows:

29.75 ha @ $10,000 per ha  $297,500
           29 ha @ $2,500 per ha   $72,500

$370,000

The two sales which were included in Mr Whitfield's report were as follows:

1.Citibank Pty Ltd (as mortgagee in possession) to Davey Properties Pty Ltd - 19th August, 1992, 12.81 hectares for $230,000 or $17,950 per hectare (no value attributed to a dwelling).  The comparison which Mr Whitfield made with the subject land was as follows -

"The subject has 50% of its area unsuited to subdivision whereas the whole of the sale is well suited to this use.  The subject property is of inferior location to the sale but is considerably larger in area and enjoys easy access from over 200 metres of existing sealed roadway.  The sale property had no legal access at the date of sale and the purchaser relied on being able to secure access across Crown land to Illawong street after the sale was completed.  This access was secured upon payment of $50,000 to the Crown.  Overall, the sale property is inferior to the subject."

Mr Conroy had described this land as comprising a sloping elevated site, moderately timbered and featuring rural views from the lower country and attractive water views over Pioneer Bay from the high country.  He said the site was improved with a substantial dwelling which at the date of sale required some repairs and maintenance.  However, the dwelling had since been renovated.  He said that since the sale the site had been subdivided as a park residential estate, and a number of 4,000m² (approx.) sites had been sold for (approx.) $100,000 each.  He saw the sale as superior to the subject land in terms of its subdivisional potential.  While Mr Conroy agreed that the cost of obtaining access had to be considered, he did not agree that the existing dwelling had added no value to the land.

There seemed to be some agreement that in a situation where there was no directly comparable evidence, this sale was of some valuation assistance.  The disagreement was the relative worth of the land on the subject which had future subdivisional potential. 

2.Eastpac Property Limited (AGC Advances) Ltd (as mortgagee in possession) to Windcourt Pty Ltd, 7th December 1992, 10.07 hectares for $450,000.

While this appeared as a common sale, it seems it was introduced only because it was the nearest in globo sale in proximity to the subject land.  It was seen of little assistance by both valuers and is of no assistance to the Court.

It is clear that the valuations placed before the Court are subjective professional opinions, with no directly comparable evidentiary support.  Both valuers have chosen to classify the land and both agree that the steep balance area has some value although it seems that in the absence of any specific development approval, its worth is primarily related to the conditions which might eventually be imposed on the approval to rezone and develop the better quality land.  If this was the case, then it seems to me that its primary function would be, in the eyes of a prudent purchaser, to enhance the potential of that land.  On that basis, I would accept that Mr Whitfield's valuation of the better land would be more appropriate but if the balance steeper land was not considered as having a separate value.  Bearing in mind, however, the difference between the valuers in their estimate of the better quality land, I will adopt an overall valuation of $325,000.
           The appeal is allowed, the valuation of the chief executive set aside and the unimproved value of the land as at 30th June, 1993, determined in the amount of Three Hundred and Twenty-five Thousand Dollars ($325,000).

RE WENCK
  MEMBER OF THE LAND COURT