Marshall v Minister for Lands

[1995] QLC 112

[1995] QLC 112

 

  LAND COURT

BRISBANE

22 September 1995

Re:     Determination of the unimproved value for
  the purposes of conversion of tenure
  Special Lease No 35/38401, Rockhampton District.
  Lessee:  Kerrie Dean Marshall.

(Hearing at Rockhampton)

D E C I S I O N

Mrs KD Marshall is the lessee of Special Lease No 35/38401, Rockhampton District, which is in respect of lands described as Lots 4 and 5 on Plan RN 1548, Parish of Calliungal, Town of Mount Morgan, containing an area of 810 square metres.  Under the provisions of section 207 of the Land Act 1962, Mrs Marshall made application for the conversion of tenure of this land to fee simple, the relevant date being 14 March 1994.  As at that date the Minister for Lands determined the unimproved value at $4,500 and Mrs Marshall requested that the matter of the unimproved value be referred to the Land Court for determination.
           Mr RW Marshall, husband of the lessee, appeared and gave evidence.  He stated that the township of Mount Morgan has been struggling since the closure of the mine, with many services being downgraded or withdrawn.  The town has a high unemployment rate, with 65% of the population being welfare recipients which in turn provides the community with a poorly funded council.  As there is no industry in the town, children leaving school must move to other towns to find work.
           Mr Marshall went on to say that these factors all contribute to the low prices for real estate in the town.  He said that he had attended recent auctions of residential land where blocks sold in the range of $2,000 to $2,500, while others were passed in, not reaching their reserve prices.  Some had received no bids at all.  He went on to say that there are many empty houses in Mount Morgan.
           Mr Marshall said that he had investigated the unimproved values applied to other properties in Mount Morgan.  He explained that there were allotments in East Street which he considered to be superior, where the current valuation is in the range of $3,200 to $3,500.
           Mr Marshall's principal argument was that the subject land had only a small useable area, which measured 20 metres frontage x 15 metres depth.  The balance of the 810 square metre parcel, he said, falls steeply into a gully at the rear of the property and is not useable. 
           Mr Marshall was of the opinion that the unimproved value of the land for conversion purposes as at the relevant date should be $2,900, because he thought that was the Council valuation at the relevant time.  He felt that the Department had overvalued the land as so little of it was useable.
           Mr Marshall stated that his wife had purchased the subject house and land about two years ago and it had been rented out since July 1994.  He said that they had no trouble renting the house although there are many vacant houses in the town of Mount Morgan.  He said that some people commute from Mount Morgan to Rockhampton to work, however they tend to get fed up with the distance they have to travel.  He said many people have moved to Gracemere, which is closer to Rockhampton.
           Evidence for the Crown was given by Mr AW White, a registered valuer employed by the Department of Lands.  Mr White's report describes the subject land as being situated approximately 900 metres south-east of the Mount Morgan Post Office, with access by means of the bitumen sealed East Street.  Reticulated water, power and telephone services are connected to the property. A daily mail service, a weekly garbage collection service and a Council bus service are also available.
           Mr White described the land as comprising two regular shaped allotments situated below street level, the natural fall of the land being from east to west although the slope is only slight.  He considered that the land has a good building contour, with reasonable aspect and elevation, with good views of the Mount Morgan mine and surrounding residential development.
           Mr White was not the valuer originally responsible for the valuation of $4,500.  However, he had inspected the land and the sales and agreed with that valuation.  In support of his valuation, Mr White referred to the sales of three allotments in the town of Mount Morgan.
           Sale No 1 is situated in Dee Street and contains an area of 1548 square metres.  It sold in April 1993 for $6,000 and analysed to an unimproved value of $5,000.  Mr White described this land as being a regular shaped inside allotment with bitumen sealed access, located close to the centre of Mount Morgan, with limited aspect and views.
           In comparing it with the subject land, Mr White said both are regular in shape, reasonably level and with bitumen sealed access.  He commented that the sale is larger and better located, while the subject land has superior views, aspect and elevation.
           Mr Marshall thought that he knew this property and made the point that it is much larger than the subject land, of which so little is useable.  He disagreed that the subject land had superior views, aspect or elevation.  He considered that the sale property was much superior to the subject land.
           Mr White's Sale No. 2 is situated in Gilmore Street, has an area of 2023 square metres.  It sold in November 1993 for $4,800 and analysed to an unimproved value of $4,300.  Mr White described this land as being a regularly shaped inside allotment with gravel formed access, sloping moderately from rear to front, with the rear being quite steep.  He said it has limited elevation and aspect.  Comparing it with the subject land, he said that sale land is larger, while the subject has superior location, access, elevation, aspect and building contour.
           Unfortunately, Mr Marshall did not know this property and was unable to comment on it.
           Mr White's Sale No. 3 is situated in River Parade, has an area of 721 square metres, sold in May 1994 for $3,500 and analysed to an unimproved value of $3,000.  Mr White described this land as being a regular shaped inside allotment with bitumen sealed access, with a moderate slope from rear to front and with views of the river and surrounding development.  In comparing this land with the subject, Mr White said the sale has superior aspect while the subject land is better situated, is larger and has superior elevation and building contour.
           Mr Marshall knew this allotment and did not agree with Mr White's description and comparison, which he said made it sound like the subject land had a higher position which made it superior.  He said that the subject land is quite low, with virtually no views.  He said Sale No. 3 has a gentle slope which looks across the river to the hills beyond and the whole of the land can be used.  In his opinion it is superior to the subject land.
           In Mr White's opinion, the subject land was above the average of allotments in Mount Morgan, as it had a reasonable elevation and outlook, a slight slope and a good building contour which had been used to the best advantage.  He said that the majority of the town blocks were lower.  However, Mr White was not aware of the gully affecting the rear of the property as he had thought that the allotment was fenced on its boundary.  He conceded that if the subject land had a depth of only 15 metres as claimed by Mr Marshall, the balance of the land was unusable.
           When questioned about the effect that this would have on the value of the subject land, Mr White answered:  "Again I don't think the gully affects the original valuation for the fact that the sales I've used have all inherent problems similar to that and I think that's just reflective of the market in Mount Morgan, it's reflected in the sale price of those sales".
           Mr White said that the market in Mount Morgan was very slow but not stagnant.  He thought that the sales mentioned by Mr Marshall were sold by the Council and were inferior to the subject land, mainly in aspect, elevation, etc.  As an example of the market movement in Mount Morgan, Mr White provided the details of two resales of Sale No. 1.  The first of these occurred in July 1993, when that 1548 square metre allotment was sold for $11,500 and analysed to show an unimproved value of $10,500.  The second resale occurred in July 1994, when it sold to the Queensland Housing Commission for $15,000.  The sale analysed to show an unimproved value of $14,000.  However, Mr White did not investigate the background to these sales and it emerged that this land possibly has some subdivisional potential which may be attractive, particularly to the Queensland Housing Commission.
           Mr White thought that the vacant houses in Mount Morgan were the older type of houses in poor repair.  He agreed that there was quite a bit of vacant land in addition to vacant Crown land.  He was of the opinion that the present market for the average 1,000 square metre block of land in Mount Morgan, similar to the subject land, would be about $6,000.
           In this case, Mr Marshall's principal argument was that the great proportion of the subject land is unusable.  The dimensions of the land are 20 metres frontage x 40 metres depth.  However, according to Mr Marshall, only about 15 metres of that depth is useable.  The balance of the land falls sharply into a gully and is of no use.  He considered that the land has an unimproved value as at the relevant date of only $2,900, but he was not able to support this valuation by reference to identifiable sales.  His evidence of sales was too general to be useful as a basis.
           On the other hand, Mr White valued the land as it is fenced.  He was not the original valuer and was mistaken in believing that the land inside the fence was the whole of the subject land.  He was unable to refute Mr Marshall's statement that only 15 metres of the depth was useable.  However, he did not think that this would significantly affect the value.
           Mr White relied on three sales, two of which were considerably larger than the subject land and, if Mr Marshall's statement is correct, each of which has a great deal more area of useable land.  It would appear from the descriptions of these lands that both are considerably superior to the subject land.
           Mr White's Sale No. 3 is closer to the area of the subject land although all of it is useable.  Mr Marshall disagreed with Mr White that the subject land has better elevation, aspect and view than Sale No. 3.  He makes the point that all of the sale land is useable.
           From the evidence, I think that Sale No. 3 is the most comparable to the subject land.  I do not find Sales Nos. 1 and 2 particularly helpful because of their size and their possible potential for subdivision, as may well be illustrated by the resales of Sale No. 1.  While Mr White and Mr Marshall disagree on some of the relative merits of the subject land and Sale No. 3, it appears to me to be the closest comparison available.  This land sold close to the relevant date for $3,500 and I think that it is the best indicator of the value of the subject land.
           It is of some concern that Mr White valued the land without knowing that part of it had been lost into the gully.  However, in a town like Mount Morgan, I think that a house site is more relevant than the size of the allotment.  It appears from the evidence that there is little wrong with the available house site.  This would appear to be supported by the fact that it was easily able to be rented.  In the circumstances, I have come to the conclusion that an unimproved value of $3,500 is appropriate as at the relevant date.
           Accordingly, the unimproved value for Special Lease No 35/38401, Rockhampton District, for the purposes of conversion of tenure is determined at Three thousand, five hundred dollars ($3,500).

(JJ Trickett)       
  Member of the Land Court