Neilsen v Chief Executive, Department of Lands
[1996] QLC 55
•30 April 1996
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BRISBANE
30 APRIL 1996
In the matter of an appeal against a valuation
Valuation Roll No.: 15889/10000
Local Authority: Hervey Bay (V95-605)
George W Neilsen
v.
Chief Executive, Department of Lands
REASONS FOR DECISION
Mr Neilsen is the owner of land described as Lot 59 on Plan CP 884713, Parish of Walsh, being Special Lease No. 200653. Under the provisions of the Valuation of Land Act 1944 as at 1 January 1995 the respondent determined the unimproved value of that land at $90,000. Mr Neilsen objected against that valuation and following a decision disallowing his objection he appealed to the Land Court against the respondent's decision upon the objection. His estimate of the unimproved value at the relevant date is $40,000.
The subject land is situated on the western side of Beelbi Creek on the Hervey Bay-Burrum Heads Road, approximately five kilometres south-west of Toogoom. Access is via the Hervey Bay-Burrum Heads Road, which is a bitumen sealed road providing good access. Access is also available at high tide to Beelbi Creek for the launching of a small boat. Access to Hervey Bay via that creek is possible at periods of high tide. Services available to the land include telephone and electricity.
The land is zoned “Rural A” under the town planning scheme for the City of Hervey Bay and is designated “Non-Urban” on the draft Strategic Plan. The land is virtually vacant, the only improvements being an old shed, some bee hives and eight citrus trees.
Mr Neilsen appeared on his own behalf and gave evidence, while valuation evidence, for the respondent was given by Mr DR Gaedtke, a registered valuer employed by the Department of Natural Resources.
Mr Neilsen's first ground of appeal is: “ (1) The valuation is out of relativity with other properties in the area”. He cites as examples, 200 acres of leasehold land next door has been for sale for $25,000; and 55 acres of freehold land, cleared, with dams and yards, sold for $135,000. In response to that ground, Mr Gaedtke gave evidence about those two properties. The first property was held under special lease tenure, described as Lot 112 on Plan CP 884088, with an area of 70.98 hectares and Lot 114 on Plan CP 884088, with an area of 11.52 hectares. At the time the land was offered for sale for $25,000 it comprised one parcel.
However the special lease had only a short time to run and Mr Gaedtke said that the lessee endeavoured to dispose of the land before the lease had completed its term. Subsequently, Lot 112 has since been acquired by the Crown for purposes of a national park, while Lot 114, with the area of 11.52 hectares, has been freeholded. In the circumstances, I find that transaction to have been of no assistance in this matter.
The other example concerned the sale of land known as Lot 1 on registered Plan 217481, which was one of Mr Gaedtke's basic sales. That property has an area of 19.64 hectares and sold in July 1995 for $142,000. Mr Gaedtke analysed that sale to show an unimproved value of $120,000 and applied $115,000 as at 1 January 1995. Mr Gaedtke described the property as being a creekfront lot opposite the subject land and superior to it, because it has a larger area and is a better home site. I will return to that sale when dealing with Mr Gaedtke's basis.
Mr Neilsen's ground of appeal No. 2 is that the sales that were used by the department are freehold and not leasehold lands. He considered that there is a big difference in the value of freehold land and that of leasehold land. However, while Mr Neilsen seemed to be of the opinion that his land should be valued as leasehold land, the provisions of the Valuation of Land Act are quite clear. Section 14 requires that land which is not held in fee simple must be valued as if it was held in fee simple.
Mr Neilsen's ground No. 3 is that the valuation does not reflect the use of the land. The constraints placed on land use by the Department, namely the 100 metres buffer zone, affects the value of that land.
Ground No. 4 is that none of the disabilities of the land have been fully considered, including the large area subject to flooding.
I will consider Grounds Nos. 3 and 4 later in this judgment.
Mr Gaedtke gave detailed evidence about the valuation of the property. He valued the land under the provisions of Section 14 of the Valuation of Land Act, which required it to be valued as if it was held in fee simple, with regard being had to the relevant special lease conditions that attach to the land.
As a basis for his valuation Mr Gaedtke relied on three sales. His Sale No. 1 is situated immediately to the west of the subject land, has an area of 4.34 hectares and is zoned “Rural A”. It sold in January 1995 for $91,500. Mr Gaedtke analysed that sale to show $85,000 and applied an unimproved value of $73,000 as at the relevant date. He described it as a creekfront home site adjoining the subject land. He considered it to be inferior to the subject land, because it has a steep fall from the best available home site to the creek.
An earlier sale of that property in October 1993 was for $86,000. Mr Gaedtke considered that the later sale shows a rise in values from 1993 to the relevant date of this valuation.
Mr Gaedtke's Sale No. 2 is of a property situated to the south-west of the subject land comprising 3.939 hectares zoned “Rural C”, which sold in September 1994 for $90,000. He analysed that sale to show $84,000 and applied an unimproved value of $73,000 as at the relevant date. He described that property as being a creekfront home site and considered it to be inferior to the subject land.
Mr Gaedtke's third sale was of the property already described, which sold in July 1995 for $142,000 and to which he had applied an unimproved value of $115,000. He considered it to be superior to the subject land.
Mr Gaedtke remarked that the subject land is well located, being in close proximity to Toogoom, with a frontage and boating access to Beelbi Creek. The land has good access. It offers suitable building sites away from any areas subject to occasional flooding. He considered that the unimproved value of $90,000 that he has applied to the subject land is appropriate in the circumstances.
This land has been valued under the provisions of Section 14 of the Valuation of Land Act, the relevant parts of which read as follows, "For the purpose of deciding the unimproved value of land that is not granted in fee simple the land is to taken to be granted in fee simple." Subsection (5) of Section 14 provides that in making the valuation of the unimproved value of any land in a lease, licence or permission to occupy under the Land Act 1962, the unimproved value of that land shall be determined having regard to and making proper allowance for any restriction or limitation of use having regard to the purpose and the conditions to which that permit, lease, licence, permission to occupy or agreement is subject.
In this case the subject land must be valued as if it is held in fee simple. The purpose of the lease restricts its use to rural residential purposes. Mr Gaedtke considers that given the location and zoning of the land, use for rural home site purposes is the highest and best use of the site. This is confirmed by the fact that the land surrounding the subject land is in subdivision and most of it is used for rural home site purposes.
With regard to the lease conditions, Mr Gaedtke considered that most of the conditions do not affect the valuation of the land. However, he felt that the lease condition requiring a buffer area of 100 metres inland from high water mark may be considered to affect its value, as it restricts the use and development of the nominated area.
The condition was included to protect the adjoining tidal waterway from incompatible activities on the subject area. It is considered that from a rural home site perspective, that condition has only a minimal effect, given the topography of the land, its infrequent flooding and the fact that the most desirable building site is on the higher land closer to the road and available services.
Mr Gaedtke made an allowance of 10 per cent in the valuation because of that condition. He felt that was sufficient and that no other allowance need be made.
In the circumstances of this case I am of the opinion that Mr Gaedtke has made a proper valuation of the land, having regard to the conditions attaching to the lease and making due allowance for the one condition which has affected its value.
One other matter was raised by Mr Neilsen. The subject land, which was previously held with other land to the north under special lease tenure (a total area of approximately 31.9 hectares), had been valued in 1986 at only $40,000. The valuation made as at 30 June 1993 for that land had been $90,000. As at 1 January 1995 it was valued at $110,000. However, that valuation had not taken effect, because Mr Neilsen had been granted a new special lease of 15.9 hectares over the subject land, the balance of the former special lease being retained by the Crown. The subject land was then valued at $90,000, which is the subject of this appeal.
Mr Neilsen questioned why the larger area of the former special lease could be valued at $110,000 while the present smaller area is valued at $90,000. Mr Gaedtke explained that in his opinion the most valuable area of the former special lease was in the southern part, i.e the part that is now the subject of the new special lease, while there was little value in the area to the north which has now been taken by the Crown.
I am satisfied that Mr Gaedtke has adequately answered that question.
After considering the whole of the evidence in this case, I have come to the conclusion that the appeal should be dismissed.
Therefore the appeal is dismissed and the valuation of the Chief Executive is affirmed at the sum of Ninety Thousand Dollars ($90,000).
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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