Lowe v Chief Executive, Department of Lands

[1994] QLC 50

[1994] QLC 50

 

LAND COURT BRISBANE

25TH AUGUST, 1994

Re:     Determination of Unimproved Value

Application for Conversion of Tenure - SL 37/37527 Town of Blackwater

Victor James Francis Lowe and Coral Lowe v.

Chief Executive, Department of Lands

(Hearing at Emerald) D E C I S I O N

V.J.F. and C. Lowe are the lessees of land situated in Fig Street, Blackwater, described as Lot 35 on Plan B33760, Parish of Blackwater, containing an area of 709 sq. metres. This land comprises Special Lease No. 37/37527, Springsure District, the term of which commenced on 1st December, 1972. A dwelling-house is constructed on the land.

Fig Street is bitumen sealed with concrete kerbing and channelling. Water, electricity, sewerage, telephone and cleansing services are available. The land is described as a near level, well drained inside allotment within 2 km radius of all local amenities.

Mr and Mrs Lowe acquired the property at auction. The records indicate that the date of transfer was 5th May, 1993, the purchase price being $28,000. The purchase price was apportioned as being $2,000 for the leasehold land and $26,000 for the improvements.

Soon after the transfer, an application was made for conversion of the tenure under the provisions of the Land Act 1962 (section 207). The application was received by the Department of Lands on 29th June, 1993. It is at that date when the freehold unimproved value of the land is required to be determined.

The Department conducted a valuation of the land. The assessment was in the amount of $12,500.  The matter was subsequently referred by the Minister to the Court

for determination of the unimproved value.

Mr Lowe attended a hearing in Emerald. In his opinion, the unimproved value of the land at the relevant date was $2,000. He said that the Town of Blackwater was in decline due to a downturn in the coal mining industry. A closure of a mine had been the reason for a series of auctions of a number of dwellings (including the subject property) in early 1993. Following these auctions and with further decline in mining activities in the locality, many houses in Blackwater were unoccupied. Mr Lowe said that at the time of the hearing only four houses in Fig Street were occupied. He was unaware of any vacant land sales in the town which would assist in establishing the unimproved value of the land. He did not see it as prudent to accept the Department's valuation when no market existed for vacant land in the town. He felt he would be able to acquire cheaper land in more desirable localities closer to the coast.

Evidence in support of the Department's assessment was given by Mr M.S. Craig, registered valuer. He had not carried out the original assessment but had made himself aware of the basis of valuation. Mr Craig was frank and forthright in his evidence. He spoke of the difficulties involved in obtaining evidence of value. Most of the residential land in Blackwater was leasehold and at the relevant date of valuation no recent freehold land sales had taken place. He agreed with Mr Lowe in that, subsequent to the initial auctions of about 150 houses by one of the mining companies, there was a perception that Blackwater was becoming a "ghost town". Adding to the problem was a further auction of Department of Works houses, although those were on freehold allotments. Many houses had been purchased at the various auctions for removal onto district rural properties. Some of the leases on the lands from which houses were removed had been surrendered.

At the date of valuation, the only real evidence of freehold residential land value in the locality came from the Township of Bluff, about 20 km to the east of Blackwater. Bluff is predominantly a railway township with a population of about 700 persons and the facilities there are significantly inferior to those in Blackwater. Bluff residents travelled to Blackwater for shopping and larger town facilities.  Three vacant lots, larger

in size than the subject lot, (1,012 sq. metres and 1,100 sq. metres) had sold during 1992 for prices of $7,500, $9,000 and $10,000. Over the years values in Bluff had shown an upward trend and valuations under the Valuation of Land Act 1944 had increased accordingly.

On the contrary, lack of evidence had resulted in those values in Blackwater remaining static since 1986. The valuation on the subject property had not increased since that time and remained, as at 30th June, 1992, in the sum of $8,900.

Relative to his valuation duties for the Department, Mr Craig expressed concern as to the relativity which had developed between the statutory valuations of land in the Towns of Blackwater and Bluff. He felt that the gap had become too narrow due to what he saw as the obvious superiority of amenities in Blackwater.

Mr Craig was aware that two allotments in a Department of Lands residential estate in Blackwater, which had been available for many years, had been purchased from the State (both lots by the same purchaser) for $11,500 each. This occurred subsequent to the relevant date in this matter. Those lots were, in his opinion, inferior to the subject land.

Mr Craig predicted that future levels of vacant land value in Blackwater would be controlled by any market activity resulting from the removal of houses from the freehold property disposed of by the Department of Works.

The predicament of the lessees here is clear. Prima facie, there is good reason for them not to proceed to convert the lease to freehold tenure when there is a distinct possibility that the supply of residential land in Blackwater will exceed demand in the short term, if not in the foreseeable future. Historically, the level of land value in a locality is reflected in the forces of supply and demand.

Even so, at the date relevant to this matter, the only available evidence suggests that the Department's assessment of value was not excessive. Indeed, even at the date of the hearing, while there exists a distinct perception that difficulty would be experienced in effecting a sale of a vacant residential lot in Blackwater, there is no evidence to prove the extent of any decline in value or from what level that decline

would commence.

On the state of the evidence, I am unable to find that the Department's assessment has been shown to be wrong. The unimproved value of the land as at 28th June, 1993, is accordingly determined in the amount of $12,500 (Twelve Thousand Five Hundred Dollars).

RE WENCK MEMBER OF THE LAND COURT