Pickers (Cairns) Camping and Canvas Pty Ltd v Minister for Lands

[1994] QLC 32

[1994] QLC 32

 

  LAND COURT

BRISBANE

14 July, 1994

Re:     Determination of unimproved value for
  conversion of tenure purposes -
  Special Lease 09/51321 - Cairns District -

Lessee:  Pickers (Cairns) Camping and Canvas Pty Ltd

D E C I S I O N

The Crown seeks an unimproved value of $285,000 for SL09/51321, Cairns District, for the purpose of the conversion of tenure to freehold as at a relevant date of 16 July, 1992.  The lease is more particularly described as Lot 705 on Plan NR 8044, Parish of Cairns, and contains an area of 4066m².  It is a "Heavy Industry" zoned site situated at 18 Redden Street, Portsmith, and about 3kms south of the Cairns Post Office.  The site is located in an industrial estate which was developed by the Department of Business Industry and Regional Development (as it is now known) as part of what is called the Portsmith Industrial Estate.
           Called in evidence by the lessee company was Peter Frederick Leitner who is the owner/manager of George Pickers (Cairns).  Mr Leitner is an electrical engineer by profession.  He informed the Court that his company has premises in Mulgrave Road, Cairns, and in the late 1980s the business was running out of room at that site.  He approached the Department of Industrial Development (as it then was) seeking a site for expansion and as a result was granted the subject lease in late 1990.  The site has been developed with an industrial building complete with security fencing which was constructed in about 1991.  The fence posts are now rusting as a result of the salt content in the soil with the water table close to the surface.  Mr Leitner believes that the estate was not filled to a satisfactory level and he has concerns for the future of his industrial building.  He has recently received a quotation of $3,000 from The Fence Shop for the replacement of the pipe posts in the security fence over 240 metres of its length.  Mr Leitner has received a geotechnical report in January 1990 which confirmed that the site is located in what was previously a mangrove swamp area which was filled and developed in about 1984.  Very soft to soft compressible marine clay underlies the fill on the site.  As a result of the geotechnical investigation, Mr Leitner concludes that the soil types on the land led to higher than normal costs in providing a suitable foundation for the industrial building on the land.
           Mr Leitner has obtained a quotation from Cairns Earthmoving Contractors Pty Ltd to raise the level of the subject site by 0.5 metres on the assumption  that it was vacant.  This calculates to $48,300 on the basis of the cost of importing fill to the site at $21 per m³ as at July 1992.  Mr Leitner informed the Court that there are flood access problems in Redden Street when high tides coincide with abnormal rainfall.
           Valuation evidence was called by the lessee from Practising Registered Valuer Kevin Francis Malone who values the land at $245,000 ($60m²).  He describes the site as being near level and regularly shaped and slightly above the level of the surrounding road system.  Mr Malone says the land has been filled with a "C" class fill to a depth of about 1 metre and compacted over the years.
           Mr Malone says that the state of the industrial market in Cairns at the relevant date for valuation was limited with very few sales of unimproved properties taking place during 1991 due to the depressed market conditions.  He lists, as a basis for his valuation of the subject land, eight sales of which five are structurally vacant.  Details of the vacant sales tabulated by Mr Malone are -

Lots 10 and 11 on RP 707972 - 1110m² - sold on 10.4.92 for $145,000 ($130m²) - situation 305 Spence Street.  This is a regularly shaped site slightly above road level which Mr Malone sees as being superior to the subject land on a square metre basis.

Lots 19/21 on RP 712546 - 1617m² - sold on 27.4.92 for $150,000 ($92m²) - situation 231 Scott Street.  This is an inside lot with reasonable access and it is slightly above road level and is also considered by Mr Malone to be superior to the subject land on  a rate per square metre basis.

Lots 16-18 on RP 712546 - 1614m² - sold on 22.5.92 for $165,500 ($102m²) - situation 221 Scott Street.  This is a corner lot on a reasonably busy intersection.  It is filled to about 500mm above street level and retained by a masonry block wall.  Again Mr Malone sees this land to be superior to the subject land on  a rate per square metre basis.

Lot 3 on RP 749108 - 2663m² - sold on 2.11.92 for $265,000 ($99m²) - situation 50 Comport Street.  This is a regularly shaped lot fenced on three sides with good exposure and access to Southern Access Road.  Again Mr Malone sees this site to be superior to the subject land on a rate per square metre basis.

Lot 4 on RP 749108 - 2663m² - also sold on 2.11.92 for $265,000 ($99m²) - situation 48 Comport Street.  This is a regularly shaped site with side access.  It is fully fenced and has good exposure and access to Southern Access Road.  Once again Mr Malone sees this site to be superior to the subject land on a rate per square metre basis.

A factor of influence on Mr Malone's valuation of the subject site is its lack of exposure to passing traffic.  He points out that there is virtually no passing traffic in Redden Street compared to the higher level of passing traffic past the sale sites.  In addition, he says Comport Street is flood free and is of the opinion  that sites in Comport Street are more valuable than are sites in Redden Street.
           The Crown recommendation of a value of $285,000 ($70m²) for the subject site was made by Departmental Registered Valuer Patrick Francis Goodman-Jones.  Mr Goodman-Jones relies for his valuation on five sales of "Heavy Industry" zoned sites in Cairns all of which were also included within Mr Malone's valuation report.  But Mr Goodman-Jones sees the relationship between the sale sites and the subject land in a different light from Mr Malone.  He sees 305 Spence Street ($130m²) to be in a superior location to the subject land, but regards the sale land to be inferior overall due to its much smaller area.  Mr Goodman-Jones considers that a block of similar size to 305 Spence Street in the location  of the subject would have a value of $110m².
           Mr Goodman-Jones regards 227-231 Scott Street to be inferior to the subject due to size and location and says that a block of similar size to the sale property would have an unimproved value of $100m² if located in the same position as the subject property.  He offers the same remarks as to the comparison between the subject land and 221-225 Scott Street.  As for 50 Comport Street, Mr Goodman-Jones sees this property to be superior in location to the subject land but is smaller, and would indicate a value of $85m² for a block of similar size in the subject location.  Mr Goodman-Jones makes the same remarks about the sale land at 48 Comport Street.
           Mr Goodman-Jones is in general agreement with Mr Malone in respect of the industrial land market in Cairns which he says bottomed out from the end of 1991 to the end of 1992.
           What then does the Court do with the conflicting evidence as to the value of the subject land when it is provided by two such experienced valuers.  I can do simply no better than to conclude that a value of $65m² is reasonable in the circumstances, such value to be taken as making adequate allowance for the inferior quality fill and the salty nature of it. 
           It follows then that the unimproved value of SL09/51321, Cairns District, for the purpose of conversion of tenure be determined in the rounded off sum of Two hundred and sixty-four thousand dollars ($264,000).

(C.H. Carter)    
  Member of the Land Court