Queensland and Pacific Pty Ltd v Department of Natural Resources and Mines

Case •

[2003] QLC 29

•

8 May 2003

LAND COURT OF QUEENSLAND

CITATION: Queensland and Pacific Pty Ltd & Ors v Department of Natural Resources and Mines [2003] QLC 0029

PARTIES:Queensland and Pacific Pty Ltd(applicant)vChief Executive, Department of Natural Resources and Mines(respondent)

FILE NO:AV2002/0120

PARTIES:XYZ Investments Pty Ltd(applicant)vChief Executive, Department of Natural Resources and Mines(respondent)

FILE NO:AV2002/121

PARTIES:Leighward Pty Ltd & XYZ Investments Pty Ltd(applicant)vChief Executive, Department of Natural Resources and Mines(respondent)

FILE NO:AV2002/0131, AV2002/0132 and AV2002/0133

DIVISION: Land Court of Queensland

PROCEEDING:  Appeals against annual valuations under the Valuation of Land Act 1944

DELIVERED ON:  8 May 2003

DELIVERED AT:   Brisbane

HEARD AT: Brisbane

MEMBER:Dr NG DIVETT

ORDER: The unimproved values as determined by the Chief Executive are set aside, and the following unimproved values are determined in the sums of:

Seven Hundred and Thirty Thousand Dollars ($730,000) – AV2002/0120;

Five Hundred and Forty-Five Thousand Dollars ($545,000) – AV2002/0121;

Two Million, Two Hundred Thousand Dollars ($2,200,000) – AV2002/0131;

Six Hundred and Sixty Thousand Dollars ($660,000) – AV2002/0132;

Two Hundred and Thirty-Five Thousand Dollars ($235,000) – AV2002/0133.

CATCHWORDS:   Valuation – valuation of particular properties – use of tidal lands – impact of mangroves – access to river – Fisheries Act 1994.

Valuation – valuation of particular properties – use of tidal lands – control of foreshore – Transport Infrastructure Act 1994.

Valuation – particular factors in valuation – marine precinct – added value of fill – cost to purchaser to acquire.

COUNSEL:Mr W Isdale of Crown Law

APPEARANCES:  Mr T Gay for the appellantsMr W Isdale for the respondent

Background

  1. These five matters were heard concurrently and relate to the following lands at the Coomera Marine precinct at Coomera, Gold Coast, Parish of Coomera:

    ·Waterway Drive – Lot 403 on SP 134172;  Term Lease 215424 and Lot 5 on SP 113789 (AV2002/0120)

    ·Waterway Drive and Shipper Drive – Lot 9 on SP 126783 (AV2002/0121)

    ·76 to 84 Waterway Drive and Shipper Drive – Lot 402 on SP 131463;  Term Lease 215196;  and Lots 43, 44 and 46 on SP 141005 (AV2002/0131)

    ·Shipper Drive – Lot 45 on SP 141005 (AV2002/0132)

    ·Shipper Drive – Lot 47 on SP 141005 (AV2002/0133)

  2. For purpose of valuations, the five properties have the following areas:

    ·AV2002/0120 (Lot 5) – 2.8153 hectares

    ·AV2002/0121 (Lot 9) – 2.859 hectares

    ·AV2002/0131 (Lots 43, 44 and 46) – 9.1074 hectares

    ·AV2002/0132 (Lot 45) – 1.691 hectares

    ·AV2002/0133 (Lot 47) – 3352 m².

    The total area of 2.8153 hectares of AV2002/0120 includes an area of seabed lease of 3153 m² (Lot 403);  while the total area of 9.1074 hectares of AV2002/0131 includes an area of seabed lease of 9,832 m² (Lot 402).

  3. The Coomera Marine precinct is located about 2.5 kilometres east of the Pacific Motorway, adjoining the Coomera River, and has direct water access to the Southport Broadwater.  The precinct is a recent specifically designed area to provide sites for marine manufacturing and associated service sector, and is now attracting international marine suppliers.  Overall the Marine precinct is planned to cover an area of 250 hectares.  Waterway Drive is an industrial width concrete paved carriageway with concrete kerbing and channelling.  Shipper Drive has an industrial width concrete carriageway with concrete kerbing east of Waterway Drive;  but is only an earth formed roadway with earth shoulders to the west of Waterway Drive.  Access to the Marine precinct is via Beattie Road from the Pacific Motorway.  All normal urban utility services are available.

  4. All subject lands are zoned as Waterfront Industry under the Albert Shire Council Town Plan of 24 February 1995, effective at the date of valuation of 1 October 2001.  The subject lands and surrounding lands are shown as Industry under the Albert Corridor Development Control Plan No 5.  The draft Gold Coast planning scheme of the Gold Coast City Council (the Council) depicts the subject lands and surrounds as Coomera Marine Precinct under the Coomera Local Area Plan.  The draft plan has been on public display and has been widely understood.  The key issues are the nature of the land, methods of valuation, use of the land, relativity and comparison of sales.

  5. On 25 February 2002 the Chief Executive issued valuations of the subject lands at $790,000 (AV2002/0120);  $615,000 (AV2002/0121);  $2,424,000 (AV2002/0131);  $660,000 (AV2002/0132) and $250,000 (AV2002/0133).  Following objections the Chief Executive confirmed those figures on 11 June 2002.  The appellants have now appealed claiming the unimproved value should more properly be $455,000 (AV2002/0120);  $400,000 (AV2002/0121);  $1,424,000 (AV2002/0131);  $250,000 (AV2002/0132) and $53,600 (AV2002/0133).  Following a request for an adjournment, the matters were heard on 13 November 2002.

  6. Mr Trenton Gay, an experienced developer, appeared and gave evidence for the appellants.  Mr W Isdale, Counsel of Crown Law appeared for the respondent, calling evidence from Andrew John Delgarno, the departmental registered valuer responsible for determining the valuations.

The Nature of the Lands –

Lots 403 and 5 –

  1. This parcel (Lot 5) is regularly shaped with a 100 metre frontage to the Coomera River, and with good access to Waterway Drive via Easements A and B along its northern boundary.  The freehold Lot 5 is mostly filled and revetted land, with the eastern 30 metres having been dredged to form a regular revetted riverbank and bed as directed by the Council for flood mitigation purposes.  The leasehold portion (Lot 403) is an area of 3,153 m² of tidal land below high water within the Coomera River.  In its natural state the land was low lying and prone to flooding, with mangrove flats at the river’s edge.  The subject land is presently vacant with intentions for marine industry purposes.  The area of dry land on Lot 5 is about 2.2 hectares, and the dredged area of freehold land reflects about 3,000 m².

Lot 9 –

  1. This parcel is regularly shaped with a frontage of 96 metres to Waterway Drive and 297 metres to the unformed Shipper Drive.  The parcel is fully filled, but was vacant and unused at the date of valuation.  Subsequently a small area on the eastern end of the Waterway Drive frontage has been improved with a factory shed used by a “Mercury” distributor for outboard motors.  In its natural state the land was level and low lying flood prone land.  The subject land is incumbent by Easements B and C for drainage purposes for flood storage, along its southern and western boundaries, in favour of the Gold Coast City Council.

  2. Mr Gay advises that any development of the western part of Lot 9 will be impacted by the need to contribute to a drain and culvert across Shipper Drive, which will be constructed by the Council at some future time.  He further notes that while Lot 9 is a corner parcel, any future access to Shipper Drive will be subject to major contributions by the appellant to the construction and upgrading of Shipper Drive. 

  3. Mr Gay further advises that an application from the appellant for the purchase of part of the road area (Shipper Drive), as achieved joining Lot 47 at the eastern end of Shipper Drive, was refused by the Council on the advice of the Main Roads Department.  The reason given by the Council was that Main Roads Department objected under the Transport Infrastructure Act in view of possible future major arterial road needs in that area. 

  4. Mr Gay notes that any future upgrading of the western end of Shipper Drive would also be a benefit to Lot 54 to the west of Lot 9 (owned by the Department of State Development), and also Lot 98 to the north of Shipper Road.  Mr Gay agrees that Lot 98 is proposed as marine precinct, but advises that the current owners are seeking approval for residential development.  Mr Delgarno argues that other parcels on Waterway Drive are also zoned as Future Urban, but are planned in the draft plan as Future Marine Precinct.  Whatever the likely final nature of the development of Lot 98, Mr Delgarno sees that Lot 9 has some future potential for exposure to Shipper Drive, and he has valued Lot 9 accordingly.

  5. Mr Gay advises however that the current flood modeling of the area is restricted northwards by Shipper Drive, and any allowance for increased exposure of Lot 9 to Shipper Drive is merely speculation by Mr Delgarno.  However Mr Delgarno maintains that, while the current proposed area for marine precinct of 250 hectares does include even some lands currently used as cane farming, he argues that the intent of the draft plan is clear that a large area in that locality is to be developed for Marine Precinct purposes.

  6. Mr Gay also advises that informal advice from Main Roads Department is that an area of about 7,000 m² may be required at the western end of Lot 9, should a future eastern arterial roadway proceed.  Mr Gay advises that latest verbal advice is in contradiction to previous formal advice to the appellants that the eastern arterial road would not be proceeding.  The appellants purchased Lot 9 on that understanding.  Any date for a possible development of such an arterial road is unknown (possibly 20 years), but already several properties to the south of Lot 9 (Lots 47 and 48) demonstrate the possible alignment of the arterial road corridor.  Any proposal to fill Lot 9 in that area has been rejected, and a formal interim notice has issued.

  7. In respect of the general level of filling required on Lot 9, to bring it to a finished level for development for marine industry purposes, Mr Delgarno agrees that the marine precinct generally falls from Beattie Road in the south to Shipper Drive in the north.  On that basis he agrees that there would be more filling needed upon Lot 9 than on the parcels used as sales evidence south of Lot 9 (Lots 46 to 49).  Mr Delgarno also agrees that the potential future resumption of land for the eastern arterial road would be seen in the market place as some disability.  However as it was still only speculation at this time, he argues any real loss of value would later be compensated should a resumption of land proceed.  He suggests that any “blighting” of Lot 9 because of the uncertainty of the future arterial road might reflect only 5% of its value as unaffected.

Lots 402, 43, 44 and 46 –

  1. The freehold Lots 43, 44 and 46 have been developed as the Gold Coast City Marina, consisting of filled and revetted lands developed with facilities, sheds and hard standing areas (Lot 43 and 46);  while Lot 44 has been dredged to below high water level for use as marine berths.  In its natural state the lands were low lying and prone to flooding with mangrove flats, similar to Lot 5.  The leasehold area (Lot 402) of 9,832 m² is below high water in the Coomera River.  Mr Delgarno has valued the seabed leases compared to other seabed leases on the Gold Coast, reflecting their potential use in conjunction with the adjoining freehold lands.  The values attributed to those seabed leases were not contested in this matter, and do not appear to be at issue for resolution.

  2. In his valuation of the subject land, Mr Delgarno argues that even without the benefit of the seabed lease (Lot 402), the subject lands continue to have direct access to the Coomera River, and he has therefore valued the freehold parcels on that basis.

Lot 45 –

  1. This is a narrow rectangular shaped parcel of virtual depth 46 metres, and actual water frontage of 370 metres to the adjoining deep water marine area (Lot 44).  The subject land (called “Moor and Store”) comprised about 6,387 m² of fully filled and revetted land abutting Shipper Drive, while the balance area (1.052 hectares) is land dredged to below high water mark and used for 64 boat moorings.  The dry land is used for storage sheds each of about 20 m², and does not have direct river frontage.  The subject land provides access to the river via Easement P in Lot 44.  Both parties agree that this marina is virtually unique in Queensland, providing freehold berths for boats, with adjoining storage managed by a Body Corporate structure.  While agreeing that Lot 45 is not a directly river front parcel, Mr Delgarno argues that the nature of its waterfront berths makes it virtually directly comparable.  He argues that the current developed intensity justifies that conclusion.

  2. Mr Delgarno explains that in assessing the unimproved value of Lot 45 under the Valuation of Land Act, he is bound to consider the parcel as vacant, but all surrounding developments are to be taken as they currently exist.  On that basis he argues that Lot 45 is taken to have direct access to water and eventually the river.  Mr Gay notes that the water access through Lot 44 is only achievable because the appellants spent large costs ($3,300,000) in developing that site for marina berths.

Lot 47 –

  1. This is an irregular shaped parcel with a 40 metre frontage to the Coomera River.  In his report Mr Delgarno saw Lot 47 as having an 80 metre frontage to Easement P in Lot 44, but concedes on Mr Gay’s advice that does not exist.  Mr Gay also notes that while the owners of Lot 47 have no legal access to Easement P, they must create very expensive retaining walls because of the waters in Easement P.  He sees that as a disability with no balancing legal benefit to Lot 47, which has been specially developed with a house boat operation.  Mr Delgarno provides a photograph of Lot 47 from Shipper Drive showing house boat moorings, partly on the dredged land of Lot 47, and partly on an adjoining seabed lease, which was subsequently issued after the current valuation, and is not included in this matter.

  2. In his assessment of Lot 47 Mr Delgarno sees that as a specific site in a specialized marine industries environment, which has been developed to a higher value as a house boat operation.  As such he believes that similar specific end users could also be interested in such sized parcels, even though many other users have sought to purchase much larger areas.  Mr Delgarno concedes that there are no directly equivalent sized parcels for sale in that area, but argues that, in his opinion, the small size of Lot 47 would not severely detract from its market attractiveness.  He does not see Lot 47 as a unique site, similar to Lot 45.

Changes in the Valuation –

  1. A matter of concern to Mr Gay is also the large increased changes that have occurred since the previous valuations, when a reasonable compromise between the parties had been achieved.  While those discussions were without prejudice, and therefore not for the knowledge of the Court, Mr Gay argues that the recent increases have been out of line with general community indices of growth, such as the Consumer Price Index (CPI) at 3%. 

  2. Mr Gay notes for example that increases have occurred in the rate per square metre for Lots 43 and 44, from $13 per square metre (1999);  $16 per square metre (2000);  and now $27 per square metre (2001).  The latter reflects an increase of 69%.  He notes also that an increase for the rate on Lot 45 from $17 per square metre (2000) to $39 per square metre (2001) reflects an increase of 129%.  Mr Gay also notes that the unimproved value of 28 Waterway Drive (Lot 38) rose by about 100% in the current valuation.  Mr Delgarno does not dispute those increases, but argues that the unimproved values are determined for each parcel by comparison with sales of comparable lands, and not merely by applying an increase based upon other criteria.

  3. Mr Delgarno further notes that the subject land at Lot 9 was sold in February 2000 for $525,000 ($18.36 per square metre) as a site in its unimproved state.  He compares that to a sale in March 2001 of Lot 50 in Waterway Drive for $550,000 ($17.20 per square metre) which then resoled in January 2002 for $825,000 ($25.80 per square metre).  Mr Delgarno notes further that the adjoining Lot 35 sold in 2000 for $835,000 ($23.80 per square metre) and resold again in February 2002 for $1,450,000 ($41.30 per square metre).  He notes that those sales between 2000 and 2002 reflected increases of 50% (Lot 50) and 74% (Lot 35). 

  4. Mr Delgarno argues that those resales demonstrate that this particular precinct has experienced a tremendous increase in value in that period.  Mr Delgarno agrees that those sales reflected existing owners in the area, which may need to ensure room for expansion, but he argues that there are others in the marine industry that would wish to relocate to the area, and he sees those resales as genuine arm’s length transactions that meet the Spencer test. 

The Method of Valuation –

  1. To support his estimate of the unimproved values Mr Gay seeks relativity with surrounding parcels in the marine precinct;  and also compares certain sales in that area on a direct comparison basis.  As a further check on those estimates he then seeks to analyze the improved sale price of the house boat subject land (Lot 47), and deducts the current cost of improvements made to that parcel.  Mr Gay has been involved in the entire development process of the estate, and provides details of the actual quantities of materials used, and updated costs of those improvements by seeking costs from two civil contractors with experience of development in the area.  Each estimate of the updated costs are based upon a one-off job at that time (Exhibits 4 to 8).

  2. However in concluding unimproved values of Lot 47 Mr Gay concedes that the method of deducting the current actual costs of development from the overall sale price of that property, results in a negative value for the residual land components (minus $204,000).  Mr Gay attributes that negative value of the unimproved land to the nature of the low flood prone marine clay extant on that property, and the extremely high cost of filling the land in that waterfront precinct.  He also argues that Lot 47 was developed as part of the overall cost of developing the estate, and was therefore developed at a lower average rate than if undertaken as a one-off project.  Mr Delgarno rejects that method, which he argues is always fraught with the problem of identifying the “added value” of the improvements, rather than their actual cost of development.

  3. Mr Gay concedes that his primary method of estimating the unimproved value was to assess the reasonable level of value based upon the previous levels agreed with the respondent in 2000, and then seeking other information to support that conclusion.  He advises that his check method is a very detailed engineering process involved in preparing and dredging the sites.  He believes that the two civil contractors’ quotations for the work are in line with an existing contract for a neighbouring property (Quintrex) on Lot 49. 

  4. That contract was for the importing and compaction of fill to a working platform at a cost of $1,000,000 for 3.2 hectares, or $25 per cubic metre.  While the finished working level was not specified, it may be assumed that the fill upon Lot 49 was to a depth of 1.25 metres.  That is not inconsistent with the depth of 1.5 metres of fill allowed for by Mr Delgarno on his Sale 1 (Lot 38), and 2 (Lot 4), used for comparison of the waterfront land.

  5. Mr Delgarno has relied mainly upon direct comparisons with three vacant sales in the marine precinct, which he argues reflect the particular market of that area.  Two of Mr Delgarno’s sales are seen as “wet” lots requiring fill, but with river frontage, and the third sale (Lot 49) is a “dry” lot without river frontage.  Mr Delgarno further argues that any land in such a situation must have a positive unimproved value, and he argues that if a negative value is determined, then it is a reasonable assumption that an error has been made in the analysis process.  To support that conclusion Mr Isdale refers me to the findings of the Land Appeal Court in Qualischefski & Ors v Valuer-General (1979) 6 QLCR 167, at page 169-170.

  1. However Mr Delgarno did use a check method on his valuation of Lot 4 (Exhibit 12, page 13).  He notes that by using that approach of a hypothetical residual work-back method of valuation, he concluded a land value of $840,000, compared to his assessment by direct sales analysis of $660,000 for that parcel.  He argues that check valuation confirms in his view that the original valuation of $660,000 is very conservative.  Mr Delgarno rejects an analysis of the sale of the subject land at Lot 47 as a highly improved property, with all the consequential difficulties of identifying the added value of the improvements.

Relativity –

  1. Fundamental to the broad matter of relativity within the overall marine precinct, Mr Delgarno argues that as a result of several recent sales of both dry lots and wet lots (such as Lot 4), it is observed that overall the level of value on all river front parcels in the precinct are too low.  Mr Delgarno agrees that Lot 4 was the only sale of river front lands during the relevant period from 2000 to 2001.  He also notes that historically the river front lands had a premium of 50% over the dry lots, particularly so in a precinct that is devoted to marine activities.  Mr Delgarno notes that the analyzed rates of dry Lot 38 ($36.80 per square metre) compared to wet Lot 4 ($49 per square metre), supports an increase of 33% for the wet lots over the dry lots.  He argues then that if dry lots were previously valued at $22 per square metre;  then adopting the old relativity between wet and dry parcels, when dry lots previously had a value of about $12 per square metre, he can conclude a reasonable present value for the wet parcels, which supports his conclusions derived from the comparison of vacant sales.

  2. Mr Delgarno agrees that various legislation of the Government in respect of constraints on waterfront lands, and also the removal of mangroves, may be a matter to note, but argues that current approvals for access to the river by both the State and the Local Government in respect of those matters suggests that was unlikely to be a problem on the wet lots of the marine precincts.  In any case Mr Delgarno notes that there is very little mangroves present anyhow in the area.

  3. There is also one major difference between the parties in respect of Lot at 45.  Mr Gay sees that as a dry lot without direct access to the river.  Mr Delgarno sees that parcel as a prime waterfront wet lot with deep water access via Easement P in Lot 44 to the river.  The difference between the parties in respect of their values of Lot 45 reflect very much that different perspective of the nature of Lot 45. 

Comparison of Sales –

  1. As noted in paragraph [26] Mr Gay sought some assistance in an analysis of the sale of the subject land at Lot 47.  That parcel sold to the existing tenant (Coomera House Boats) for $1,160,000 in June 2002.  Mr Gay analyses the cost of building up to a working platform at $683,000, and the development of the existing structures and pavements at $681,000, providing a total cost of improvements of $1,364,000.  The cost of the seabed lease (2,160 m²) was a further cost to the purchaser of $30,400.  However Mr Gay virtually rejects that analysis as he notes that the residual unimproved value of Lot 47 would be minus $204,000 if that approach is adopted.

  2. Another sale analyzed by Mr Gay was the sale of Lot 35 on Waterway Drive.  That corner parcel has an area of 3,506 hectares and has frontage to Beattie Road and Waterway Drive.  Access to Beattie Road is via a service road.  Lot 35 was purchased by Riviera on 4 February 2002 for $1,450,000 ($40.65 per square metre).  Riviera also owned the adjoining parcel (Lot 50) and also Lot 400 (area 12.158 hectares) on the eastern side of Waterway Drive, and opposite Lot 50.  Lot 35 needs limited additional filling, and is currently under an application to subdivide the parcel into 1,500 m² and 7,000 m² parcels, thus maximizing its corner position.  The parcel is currently zoned as General Industry, although it falls within the waterfront industry marine precinct.

  3. To the immediate north of Lot 35 Mr Gay relies upon a sale of Lot 50 in January 2002 for $825,000 ($25.70 per square metre).  That parcel has an area of 3.201 hectares and is owned also by Riviera.  Lot 50 is virtually undeveloped and will need considerable fill.  Lot 50 is also zoned as General Industry.  Mr Gay estimates the filling on Lot 50 at $900,000 to a working platform level.

  4. To the north of Lot 50 in Waterway Drive is Lot 49, which was purchased by Quintrex who also owns Lots 47 and 48 and adjoining Lot 49 to the north.  Lot 49 was purchased by Quintrex in September 2001 for $725,000.  The sale was by private treaty, and the terms of that sale are unknown.  Mr Gay advises that Quintrex currently has a contract of $1,000,000 to fill Lot 49 to a working platform level.  (See paragraph [28]).

  5. A common sale with Mr Delgarno was also Lot 4 in Beattie Road.  That is a 1.208 hectare partially improved parcel which sold in December 2001 for $775,000.  Mr Gay estimates the building improvements at $250,000 and the hardstand area at $50,000.  He notes that the sale has an irregular shape, and a not wide frontage to the Coomera River.  There is also a right-of-way easement access along its northern boundary for the adjoining lots to the west, Lots 2, 3 and 10.  Mr Gay estimates that a further $180,000 worth of filling would be required to bring the land to a fully working platform level, resulting in an unimproved value for Lot 4 at $295,000 ($24.40 per square metre).

  6. To support his valuations Mr Delgarno provides the following sales of lightly improved lands:

    ·Sale 1 – (28 Waterway Drive – Lot 38 on RP 170508).  This is a 3.567 hectare parcel, with an about 100 metre frontage to the Coomera River, which sold in August 2000 for $2,000,000 (exclusive of GST).  After allowing for clearing at $17,835, and importing and compacting fill (53,500 m³) at $668,750, $12.50 per cubic metre, the sale was analysed at $1,313,415 ($36.82 per square metre), and applied at $1,200,000 ($33.64 per square metre).  The sale was seen overall as similar to Lot 45, but inferior on a pro rata basis due to its inferior water frontage.  It is also seen as far inferior on a pro rata basis to Lot 47 due to the much larger overall size of Lot 38;  and is also seen on a pro rata basis as slightly superior to Lot 5 because of its superior access to Waterway Drive.  The sale is also seen as superior on a pro rata basis to Lots 43, 44 and 46 due to its smaller size.  Mr Delgarno sees his Sale 1 as his primary sale for these comparisons.

  1. ·Sale 2 – (197 Beattie Road – Lot 4 on RP 212183).  This is a 1.208 hectare L-shaped parcel, with a 51 metre frontage to the river, and also frontage to Beattie Road.  There is a right-of-way easement (Lot C on RP 212813) of area 1,445 m² along the northern boundary providing access to the river for three parcels west of Lot 4.  The sale was lightly improved with about 6,000 m³ of fill and a Steel and Colorbond shed of area 400 m².  The sale sold in December 2001 for $775,000, was analysed after allowing for clearing ($600), fill ($75,500) and a shed ($100,000) at $593,460 ($49.13 per square metre), and was applied at $540,000 ($44.70 per square metre).The sale is seen as overall similar to Lot 45, but with a slightly superior rate due to its smaller size;  similar to Lot 47 but with an inferior rate due to its larger size and more limited use;  inferior to Lot 5 due to its smaller river frontage but with a superior rate due to its smaller size;  and similar to Lots 43, 44 and 46 due to its smaller river frontage, but with a superior rate due to its smaller size.  Because of a lack of comparable small parcels of area about 3,000 m², Mr Delgarno sees his Sale 2 (Lot 4) as the key comparison for Lot 47.

  1. ·Sale 3 – (45 Waterway Drive – Lot 49 on RP 170508).  This is a 3.201 hectare dry parcel, which is not filled, but is fenced.  The land is low lying.  The sale sold in September 2001 for $725,000, was analysed at $709,000 ($22.15 per square metre) and was applied at $650,000 ($20.30 per square metre).The sale is inferior to Lot 45 on a rate basis due to lack of river frontage;  is far inferior to Lot 47 due to its location, much larger size and lack of river frontage;  is inferior to Lot 5 on a rate basis due to location and lack of river frontage;  inferior to Lots 43, 44 and 46 on a rate basis due to location and lack of river frontage;  and slightly inferior to Lot 9 due to its inside nature and lack of corner location.

  2. ·Sale 4 – (35 Waterway Drive – Lot 50 on RP 170508).  This is a 3.201 hectare dry parcel which has not been filled and is low lying, but has been cleared and fence.  The sale sold in March 2001 for $555,000, was analysed at $539,000 ($16.84 per square metre) and applied at $650,000 ($20.30 per square metre).  It is noted that the sale resold again in January 2002 for $825,000 ($26 per square metre) reflecting movement in the market, and hence the higher application to the 2001 sale.  The sale is seen as slightly inferior on a rate basis to Lot 9 due to its inside nature and lack of corner location.

  3. ·Sale 5 – (165 Beattie Road – Lot 35 on RP 859860).  This is a 3.506 hectare corner parcel improved with an old dwelling seen as providing no added value.  The land is low lying in its natural state without fill.  The sale sold in December 2001 for $835,000, was analyzed at $834,970 ($23.82 per square metre) and was applied at $790,000 ($22.50 per square metre).  The sale resold in February 2002 for $1,450,000 ($41 per square metre), demonstrating market increase.  Because the sale is valued under s.17 as a dwelling site, the above applied value is notional to this matter.  The sale is seen as slightly superior on a rate basis due to its corner location and frontage to Beattie Road, which is the main access to the marine precinct.

  4. From an overall comparison on topography of the area, it is agreed that as the land in its natural state fell from south to north, then parcels near Shipper Drive were likely to require greater filling than lands nearer to Beattie Road.  Mr Gay also agrees that there is some premium paid on a rate basis where parcels are much smaller in area than others, but he argues that Mr Delgarno has applied an unreasonable adjustment for difference in size in his determination.  Mr Delgarno argues that based upon his experience as a valuer, industrial lands which are only one-third the size of other comparable lands, tend to have rates twice the value as the larger parcels.  There is also a major difference between the parties in respect of the rate per cubic metre for fill transported to the site, and effectively compacted to provide a solid building platform.

  5. In respect of the analysis of the common sale (Lot 4) Mr Gay and Mr Delgarno have differing appreciations of the added value of the 400 m² boat shed on that parcel.  Apparently it was specifically constructed with a high roof life for the construction and maintenance of boat building.  It is currently used merely as a storage and distribution centre for the Couran Cove Holiday Centre.  From his wide building background, after allowing for depreciation of the building, Mr Gay has valued the building at $250,000.

  6. Mr Delgarno disagrees with that added value as he sees the small nature of that purpose built structure as not in keeping with the higher potential and area of Lot 4.  Mr Delgarno sees the added value of the shed at $100,000, as he feels it is really obsolete to the future development potential of Lot 4.  However he concedes that generally the buildings within the Marine Precinct have higher roof lines than normal industrial buildings, reflecting the nature of the marine industry.  Mr Delgarno also agrees that higher roof buildings are dearer to build.  He agrees that the replacement value for the old shed would be about $250,000.

  7. Another difference between the parties in respect of Lot 4 is the allowances made for filling.  Mr Gay allows by visual inspection for an existing fill of 9,000 m³ at an added value of $50,000 ($5.50 per cubic metre).  Mr Delgarno made similar estimates of existing fill concluding 6,000 m³ at an $added value of $75,500 ($12.60 per cubic metre). 

  8. Mr Gay also notes that two of the respondent’s sales (Lots 35 and 50) were purchased by either an adjoining owner, or an owner across Waterway Drive.  Because of those relationships he questions whether the sales might also reflect some premium for these relationships.  Mr Delgarno argues that because of the attractive nature of the Marine Precinct market, he does not see any large premium for that purpose in those sales, and he has treated Sales 4 and 5 as arm’s length transactions.  Mr Delgarno did reject the sales of Lots 1 and 2 in Beattie Road because that was a family transaction.

  9. Finally Mr Gay argues that because of the special nature of the Marine Precinct, and the limited parcels available for purchase, the sales applied by Mr Delgarno should reflect a “scarcity” factor in their value.  He seeks support for that conclusion in the large increase between the sale and resale of Lot 50 from $539,000 to $825,000 (53%) in less than one year.  Mr Delgarno argues that level of increase is not abnormal on the Gold Coast, where larger increases have occurred in the previous eighteen months.

The Impact of Filling –

  1. Clearly a matter of significant dispute between the parties is the quantum and cost of filling to bring the respective sites to a development platform.  (See paragraph [25] to [28]).  While there is general agreement on the depth of fill required (paragraph [28]) the estimated unit cost rate for the supply and compaction of fill, in this particular area, is widely divergent. 

  2. In arriving at his unit rate of $12.50 per m³, Mr Delgarno has obtained quotations from two haulage contractors regularly working in the Coomera/Hope Island areas.  Those quotations were obtained in August 2000 from Sheehy and Partners, and in September 2001 from Kennedy Haulage (Qld) Pty Ltd (Exhibit 14).  The Sheehy quotation varied for offsite bulk earthworks from $9.47 per cubic metre to $13.05 per cubic metre, and made no specific allowance for any onsite compaction.  Mr Delgarno agrees that the Sheehy quote was supplied for a rocky hard base, where no compaction would be required.  Those quotations were involved in another matter for a BP Service Station site on the Pacific Highway at Coomera. 

  3. The second quotation from Kennedy was for bulk supplies of “ridge gravel” compacted on site to a minimum compaction ratio of 10% at a unit rate of $11 per cubic metre.  If a higher compaction rate to 15% was required, the unit rate was $12 per cubic metre.  The Kennedy quote was supplied to consulting engineers, and relates to prospective filling at the northern end of the Gold Coast on the Hope Island area.  It is noted that Hope Island is in the Coomera River flood plain, immediately across the river from the subject land.  The geomorphology would suggest little variation in compaction requirements to the marine sediments of the subject lands.

  4. Mr Gay speculates that Hope Island may be more sandy than the subject land, but offers no evidence to support such a scenario.  On the evidence provided I accept that Hope Island is similar to the subject lands.  Mr Delgarno advises that those quotations were for large bulk filling operations varying, in his opinion, from about 10,000 m³ to 150,000 m³, and comparable to the subject lands.  However he agrees that the larger volumes would tend to attract some discount for size.

  5. Mr Gay’s advice of the filling contracts for Quintrex on Lot 49 for $1,000,000, is not disputed by Mr Delgarno, who had been unable to obtain that information from Quintrex.  However Mr Gay also provides no details of that contract, or whether the contract contained any other matters besides merely supply and compaction.  It is also noted that the contract for Quintrex was for 40,000 m³, giving a likely unit cost of $25 per cubic metre as at late 2002.

  6. Mr Delgarno by comparison has allowed $668,750 for filling on his Sale 1 (Lot 38).  He agrees that Lot 38 at date of sale was about 70% filled, which he argues means that his allowance on Lot 38 for fill is consistent with Mr Gay’s advice of $1,000,000 for Lot 49.  He notes that there are still areas of Lot 38 near the river which cannot be filled.  Mr Delgarno further speculates that if the later 2002 quotation for Quintrex was adjusted by 10% to bring it into line with the 1 October 2001 period, then the Quintrex quotation would be reduced to $22.50 per cubic metre.  He concedes however that if there were some inconsistency or unknown in respect of the appropriate rate for fill at 1 October 2001, then the determined unimproved values would be high.  He notes further that based upon his estimate of fill of 53,500 m³ on Lot 38, any adjusted figure to $22.50 per cubic metre would increase the added value of fill to $1,203,750.  However Mr Delgarno insists that it is the added value of fill which must be assessed, not just its cost of acquisition. 

Decision:

  1. Before considering the major matters of contention, I note that there is agreement in respect of the general nature and level of uniqueness of the Marine Precinct at Coomera, and its obvious attractiveness in an expanding marine industry environment.  In respect of the fact that several parcels currently remain zoned differently to others in the Marine Precinct, I note that the intentions of the local council are clearly expressed in the draft Gold Coast Planning Scheme, which has been publicly promulgated, and that is a matter that would be considered by a prudent purchaser in that area.  (Stubberfield v Valuer General (1988-89) 12 QLCR 328, per Carter J at 340.).

The Impact of Uniqueness

  1. It is Mr Gay’s argument that because of its relative uniqueness as a specialized marine precinct, it is logical to only seek comparisons with similar lands within the precinct.  However he argues that because of that scarcity of comparable properties, and the existing owners reluctance to miss any opportunity to consolidate their business in that locality, then a premium for scarcity exists in any such sales.  Now while such a logical thought process has a level of consistency, it cannot be demonstrated with the subject lands, where there are comparable sales of lands currently available.  The whole concept of a “scarcity” factor was argued in Maurici v Chief Commissioner of State Revenue and Anor [2003] HCA 8, 13 February 2003, unreported. However that matter can be distinguished in the current matter, as Mr Delgarno rejects the existence of a “scarcity factor” in the sales analyzed.

Relativity -

  1. In considering the nature of relativity I note that valuations for the purpose of the Valuation of Land Act 1944 should bear proper relativities to one another, so long as the valuations are soundly based.  (R and MM Barnwell v Valuer General (1990-91) 13 QLCR 13 at 16). However the maintenance of relativity should not be preferred to the exclusion of sales evidence (WM and TJFischer v Valuer-General (1983) 9 QLCR 44 at 46). Those principles were also followed in Hans and Else Grahn v Valuer-General (1992-93) 14 QLCR 327 at 328.

  2. In respect of the general comparisons between the dry lots along Waterway Drive, compared to the wet lots fronting the Coomera River, I accept Mr Delgarno’s advice that lands which have direct access to a river have a higher premium in their value.  Indeed the logic of that would appear even greater where an owner has a need or desire to access the water directly from his property.  While I accept Mr Gay’s advice that Quintrex, which manufactures and sells marine vessels, does not essentially desire direct water access, the very existence of a marine industry perspective would seem to support close proximity to the water.  Surely direct access to the water must be the premium location where boats are concerned.

  1. In respect of Mr Gay’s concern that various Government legislation may inhibit the free access to the river from the wet lots, I note that development along riverbanks may be subject to a coastal management plan declared under the Coastal Protection and Management Act 1995.  Under that Act s.10 defines a “coastal wetlands” where wetlands, coastal swamps and mangrove areas are to be observed.  Under such coastal management plan, any developments along the rivers may need special consideration before approval is given by the Council.  Where a regional coastal plan is in existence, then a Local Government planning scheme may be amended to ensure consistency with the regional coastal plan (s.46(1));  and a coastal building line may be declared such that a structure may not be built completely or partly seaward of that line (s.59(2)).  The Coomera River Marine Precinct is part of the Coomera Local Area Plan.

  2. I note also that there may be some potential impact under the Vegetation Management Act 1999 where open forests on the edge of marine clay plains are involved (Vegetation Management Regulation 2000, Part VII), but only where a regional management plan has been prepared by the Minister (section 11).  There was no evidence of such a plan covering the subject lands.  Vegetation management may include the retention of riparian vegetation (s.9(2)(b). 

  3. In respect of other powers for the State to control access to the Coomera River, I am directed to s.51(1)(c) of the Fisheries Act 1994, which states that a permit may be issued by the Chief Executive:

    “51.(1)  The following permits under this Act may be issued by the chief executive –     (c)   a permit to remove, destroy or damage marine plants”.

    I note also that s.8(1) of that Act defines a “marine plant” as a plant that usually grows on, or adjacent to, tidal land.  The power to issue any permit is vested in the Chief Executive whose objectives under the Act includes under s.3(2)(c) for the management and protection of fish habitats.  It is well established that mangrove areas are key fish habitat breeding grounds, and therefore are areas where removal of mangroves is of serious consideration. 

    A “marine plant” under the Fisheries Act 1994 is also a defined plant under the Nature Conservation (Protected Plants) Conservation Plan 2000.  However there is some provision for relaxation of constraints upon clearing, where the clearing of the site will not transgress a conservation plan for an area.  (Section 29). 

  4. I am also referred to s.86 of the Harbours Act 1955 which provided the power for the Governor in Council to control works on tidal lands or waters.  Section 86(2) of that Act controls the building of any works, among others, across or upon any foreshore or land lying under the sea within Queensland waters or any land lying under any Harbour, (including any navigable river)”.  Section 86 as it then was, is now covered by s.236(1) of the Transport Infrastructure Act 1994. 

  5. In respect of the relevance of the above matters, I note that it is the stated intention of the Town Plan to advance the development of the Marine Precinct at Coomera.  I agree with Mr Delgarno that any risk that direct access of some kind might be denied to the river from parcels with freehold title to the high water mark, would not be a major matter in the mind of a prudent purchaser of a “wet” lot in that area.  However it is likely that some control of any adjoining seabed lease to a “wet” lot was likely to be a mechanism for maintaining the integrity of the river flows.  On that basis I agree with Mr Delgarno that from a relativity perspective the “wet” lots with direct access to the river would reflect a higher premium value than the inland “dry” lots.

Changes in the Valuation –

  1. While I note that significant changes in the unimproved have occurred since the previous valuations, which apparently had been successfully agreed between the parties, the presence of a large increase of itself is not a reason that the unimproved values may be incorrect.  While I am aware that such percentage rises in values are often of concern to appellants in seeking to have confidence that their personal property has been fairly treated in any valuation, they in fact do not prove conclusively that any error has been made in the valuation process.  Such rises may, at best, be an indicator to owners that they should further investigate the valuation, but there may be many reasons why a valuation is changed at what would appear to be a rate out of line with some overall statistical percentage.

  2. This matter has been considered many times by the courts, and I note from precedent that a large increase in itself is not evidence of some error in the valuation.  I note, for example, in the decision of NR and PG Tow v Valuer-General (1978) 5 QLCR 378, where the Land Appeal Court said at p.381:

    “It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation.”

  3. That matter was also considered in C and BD Henricks v The Valuer-General (1983) 9 QLCR 59, where in the Full Court of Queensland, Macrossan J (later CJ) said at p.63:

    “The percentage increase shown in the selected cases was in each instance considerably less than the increase applied to the subject land as between the two valuation dates.  The weakness in such a selective comparison is obvious as there could be any number of reasons why blocks in the same valuation area should increase at different rates over a period of five years.”

  4. As the Full Court said, there could be many reasons why parcels of land can increase at different percentage rates over a period of time.  The real test is not the percentage increase in the unimproved values, but a comparison of the subject land with sales of comparable sites in the vicinity of the subject land at the time of the valuation.

The Methods of Valuation –

  1. Both parties have relied principally upon comparisons with sales of vacant or lightly improved lands.  That has long been the preferred approach adopted by courts at all levels in respect of the determination of the unimproved value.  (PH Clough v Valuer-General (1981-82) 8 QLCR 70 at 76; R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13 at 17; and Commonwealth v Arklay (1952) 87 CLR 159, at 170.) In making those comparisons the authorities are clear that in assessing the unimproved value of a parcel, s.3(1)(b) of the Valuation of Land Act directs:

    “3.(1)  For the purposes of this Act –‘unimproved value’ of land means –…(b)       in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.”

  2. Now while each of the subject lands must be viewed as if they had never been developed, the surrounding properties adjoining the parcels must be taken as they exist at the relevant time.  That is not to see the subject lands as if they were in their original prairie state;  but rather to see them as benefiting from the existing physical environment in which they are to be valued.  That was clearly explained by the Privy Council in Tetzner v. Colonial Sugar Refining Company Limited  (1958) AC 50 where Their Lordships said at page 57:

    “What in Their Lordships’ opinion is required in the present case is that the physical improvements, with any value which they attach to the land on which they are situated, be excluded from the valuer’s computation.  The land will then be valued as land devoid of buildings but situated in the community with the amenities and facilities which have grown up around it.  Their Lordships see no objection in the process of valuation to regarding the land as land situated in a sugar town.  The valuer need not shut his eyes to the fact that there is a sugar manufacturing industry in existence, though he is not entitled to value the sugar mill and its accessory situated on the subject land.  Their Lordships find themselves in agreement with an illustration given by the Learned Magistrate in his judgment.  ‘If the undeveloped capital value of a city powerhouse is being assessed one does not assume a city without electricity and all the consequences of the lack of such an amenity.’”

  3. As noted by Mr Isdale the Land Appeal Court in PH Clough v Valuer-General (supra) said at p.75:

    “We think it beyond doubt that what has to be valued is the subject parcel of land viewed as if the improvements thereon, visible or invisible, never existed but that otherwise the parcel was situated in the community (and environment) with the amenities and facilities that had grown up around it as at the date of valuation.”

  4. I note Mr Gay’s concern that Lot 45 is being valued as a “waterfront parcel”, when in fact its only access to the river is via Lot 44, which was a parcel totally dredged to provide for marine berths at the appellant’s costs.  Now Mr Gay might see that as an unjust imposition upon an appellant, who has had to create a private waterway at considerable cost to himself, but the Act deals with the value of the land, and value is created in land by several factors, one of which is the actual cost devoted to improving the environment in which the land exists.  That really is the purpose of development.

  5. On that guidance I agree with Mr Delgarno that Lot 45 does in fact have all the advantages of a waterfront parcel, and in fact benefits from a long waterfront of some 360 metres, well beyond the other river front parcels in the marine estate.  However that additional frontage must be balanced by the more restricted depth of Lot 45 for development purposes.  Clearly it is a specifically developed facility.

  6. In respect of providing a check method of valuation, I note Mr Gay’s concern that in applying his approach of deducting the updated costs of his actual quantities of development on Lot 47, he concludes a negative unimproved value for that parcel.  Clearly such an outcome might appear to be indicative of the decision of the Land Appeal Court in JL and I Qualischefski & Ors v Valuer-General (1979) 6 QLCR 167, where it said at p.169:

    “It is nonsense to advance that highly improved alluvial land has no intrinsic value.  If sales, when analysed, are reflecting nil or nominal land values then, unless exceptional circumstances apply, there must be something amiss with the process of analysis.” 

  7. It is also noted in Qualischefski in respect of the reasonableness of allowances made in a valuation, that the Land Appeal Court said at p.172:

    “The reasonableness of the allowances that have been made is always open to challenge on objection or appeal. However upon appeal a statutory onus of proof is cast upon the appellant and he has to accept, within the confines of the grounds set out in his Notice of Appeal to the Land Court, the burden of proving the Valuer-General incorrect. Neither this court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-General to substantiate his case. This is in contradiction to jurisdiction conferred under the Land Act. In appeals of the nature of the subject, the onus which the appellant must assume is not an easy one to discharge without the assistance of a registered valuer who can lead evidence as to sales analyses and/or comparison with valuations made by the Valuer-General in respect of comparable properties.”

  8. I am further reminded that it is not the role of the Court to seek to substantiate the case for the appellant.  That was emphasized in BT Dillon v Valuer-General (1986-87) 11 QLCR 231, where the Land Appeal Court said at p.233:

    “The Legislature has not given this Court any investigatory powers under the Valuation of Land Act. If the Appellant’s case is not strong enough in its own right to establish the values contended for or to disprove the Valuer-General’s values, the Court is not empowered of its own volition to probe the fairness or correctness of the Valuer-General’s values and by this means arrive at its own estimate of value.”

  9. On the evidence before me clearly the unimproved value of Lot 47 depends very much upon the added value of the improvements, including the large quantities of filling.  It is therefore not necessarily that the process was wrong, but only that the appropriate allocations had not been applied.  However I note from Mr Gay’s detailed estimates of the development of Lot 47 (Exhibit 4) that those figures used by this check method reflected updated costs and not the added value of improvements, and on that basis I reject this approach in the current matter and will rely upon comparison with sales supplied.

The Added Value of Fill –

  1. Before considering the matter of the appropriate value to apply to any filling to be deducted from the current site values of the subject land, I note that Mr Gay concedes that the actual cost of filling as an overall process for the estate, was lower than the rate for selective imported fill now provided.  However the recent decision of the Land Appeal Court in Townsville in Landell Pty Ltd as Trustees and Lakes Investments Pty Ltd as Trustees for Lakes Unit Trusts v The Chief Executive, Department of Natural Resources and Mines (LAC 2002/0032) 12 September 2002, to be reported, clearly directs at paragraph [32]:

    “[32]  The value of the improvements has to be established where the exercise of valuing the land as unimproved land is carried out in the way it was done here.  We take the relevant principle in establishing the value of such improvements to be that stated by Isaacs J, when delivering the judgment of the Court in McDonald v Deputy Federal Commissioner of Land Tax for New South Wales (1915) 20 CLR 231 at 235-236, where he said:

    ‘It is quite true that the Act defines “value of improvements” in these terms:  “the added value which the improvements give to the land at the date of valuation irrespective of the cost of the improvements.”

    The owner may have been fortunate in getting them at a specially low cost or unfortunate in having to pay an abnormally high sum.  But the material fact is that there they are , whatever they originally cost;  and the question is how much their presence adds to the natural value of the land.  And in ascertaining that, the cost of replacing them if they were then annihilated is a most material factor for a prospective buyer to consider in determining what he would give for the land, and, if for a buyer, so for the Court.’”

  2. The Land Appeal Court in Landell went on to favourably consider the Land Court decision in RT Holt v Valuer-General (1964) 31 CLLR 132, where the Learned Member found at p.139: 

    “In my view it is very clear that the appellant is entitled to have his land valued unimproved as though it were an unfilled block at the date of valuation, surrounded by filled blocks, and the value of the filling and top dressing as an improvement is to be measured not by actual cost, but by the added value the improvement gives to the subject block viewed in this light as at the valuation date.  It is true the added value is not to exceed the reasonably cost of filling and top dressing that individual block at the date of valuation, to the same extent as the subject was in fact then filled and top dressed.  But the value may, under the Act, equal that cost, whether or not in actual fact it did cost that much;  and in my opinion, in the subject case, it does equal that cost.”

  3. The Land Appeal Court in Landell concluded in the circumstances of that matter at paragraph [36](b):

    “[36](b)  The added value which a reasonable purchaser would ascribe to the improvements constituted by the fill at least to RL 3.5 may be established at the relevant date by reference to what the purchaser would incur to acquire the fill, that is, the cost of acquiring the fill from the most readily available source at a reasonable price.  On the evidence before the Land Court that exceeded $10 per cubic metre, and was $15.46 per cubic metre.”

  4. In the current matter the question then to be addressed is what is a reasonable cost to import fill separately to each of the subject lands, and to consolidate it such that a reliable building platform is available for development purposes.  Mr Gay’s unit rate price adjusted to the date of valuation, is about $22.50 per cubic metre;  while Mr Delgarno’s estimated rate is $12.50 per cubic metre.  Mr Gay advises that from his extensive experience on the Marine Precinct at Coomera, neither of the contractors who supplied quotations to Mr Delgarno have ever worked on that precinct.  By comparison he notes that the contractors who supplied updated estimates of cost to Mr Gay have had experience in the precinct area.

  5. As a test of the applied rates I note also that the filling and compaction estimates supplied by Mr Gay in respect of Lot 47 represent a cost of $86,500 for an area of 3,352 m² or a fill rate of $25.50 per square metre of area.  If the filling was to a depth of 1.5 metres that would reflect a volume rate of $17 per cubic metre;  and if to a depth of 1.25 metres (as allowed on the Quintrex site, see paragraph [27]) that would reflect a volume rate of $20 per cubic metre.

  6. If I also analyze the filling rates for Lot 45 I note that of the total area of that parcel of 1.691 hectares, an area of 11,570 m² was excavated, resulting in an area requiring filling of 5,340 m².  If I then analyze the estimated cost of filling of Lot 5 at $194,400 for an area of 5,340 m², I conclude an area fill of $36 per square metre.  On the basis of a depth of fill of 1.5 metres that equates to a volume rate of $24.30 per cubic metre;  or at a depth of 1.25 metres it reflects a volume rate of $28.80 per cubic metre.  Similar analyses of the filling on the filled area of Lot 5 (2.2 hectares) reflects volume rates of $24.24 per cubic metre (1.5 metres depth) and $29 per cubic metre (1.25 metres depth).

  7. In seeking further guidance in respect of the likely depth of filling required on each parcel, I note that it is agreed that the general level of the topography falls from south to north;  with the greatest depth of fill needed on the northern parcels of Lots 47, 45 and Lot 5.  On that basis I accept that a depth of 1.5 metres is an appropriate depth rate to apply.  If I adopt that principle I could conclude rates for filling for Lot 47 ($17 per cubic metre);  Lot 45 ($24.30 per cubic metre);  and Lot 5 ($24.24 per cubic metre).  On that basis I will accept for the purposes of Mr Gay’s conclusion a rate of $22 per cubic metre.  If that is then adjusted by 10% to bring to the relevant date I can conclude an overall rate of $20 per cubic metre.

  8. If I then consider Mr Gay’s advice that neither “Sheehy” or “Kennedy” have any experience in filling on the actual Marine Precinct, and also the lack of detail of the Quintrex contract in respect of specificity;  I believe the appropriate cost of filling and appropriate compaction in that locality falls somewhere between $12.50 per cubic metre and $20 per cubic metre.  For the purpose of this exercise, I will accept $15 per cubic metre.

Comparison of Sales –

  1. I turn then to the direct comparisons of sales evidence, and after making some adjustment for the cost of filling to $15 per cubic metre on Sales 1 and 2, I note the following amended sales analysis rates:

Sale Adjusted analysed rate per square metre Applied rate per square metre
1. (Lot 38)
2. (Lot 4)
3 (Lot 49)
4 (Lot 50)
5 (Lot 35) 		$33
$47.90
$22.15
$16.84
$23.80 		$33.64
$44.70
$20.30
$20.30
$22.50

  1. In respect of Sale 2 (Lot 4), I note also the variation in the added value applied to the old special purpose shed, which is assessed by Mr Gay at $250,000, and Mr Delgarno at $100,000.  Now while Mr Gay has considerable expertise as a developer in respect of the costs of such buildings, as Mr Delgarno is the only valuer available in this matter, I must take seriously guidance from his experience.  Indeed such guidance was given by the Land Appeal Court in Qualischefski at p.172. On that basis I accept Mr Delgarno’s opinion of an added value of $100,000 for the shed on Lot 4.

  1. If I then adjust the analyzed values by Mr Delgarno to reflect the adjusted rate of filling at $15 per cubic metre, I can conclude amended rates for Sales 1 and 2.  Sale 1 includes 53,500 m³ at an additional rate of $2.50 per cubic metre, or an additional $133,750 of filling, giving a revised unimproved value of $1,179,665 ($33 per square metre).  Sale 2 includes 6,400 m³ at an additional rate of $2.50 per cubic metre, or $15,100 of additional filling, giving a revised unimproved value of $578,360 ($47.90 per square metre).  In order to allow some benefit of doubt to the appellant, Mr Delgarno has adopted an applied rate reflecting 91% (Sale 1), and 91% (Sale 2).  On that basis for consistency I will accept amended applied rates for Sale 1 ($30 per square metre) and Sale 2 ($43.60 per square metre).

  2. If I summarize the direct comparisons, excluding the seabed leases which are not contested, I find:

Sale
Adjusted 		Comparison with applied rates of subject lands
(excluding seabed leases)
Applied rates per m² Lot 5
($30.50 per m²) 		Lot 9
($21.50 per m²) 		Lot 45
($39.00 per m²) 		Lots 43, 44 and 46
($27.00 per m²) 		Lot 47
($75.00 per m²)
1 (Lot 38) - $30 Slightly superior - Inferior Superior Far inferior
2 (Lot 4) - $43.60 Superior - Slightly superior Superior Inferior
3 (Lot 49) -
$30.30 		Inferior Slightly inferior Inferior Inferior Inferior
4 (Lot 50) – $20.30 - Slightly inferior - - -
5 (Lot 35) - $22.50 - Slightly superior - -

  1. If I then address separately each subject land, I find the following comparison:

    ·Lot 5 – This parcel is seen by Mr Delgarno as slightly inferior to Sale 1, inferior to Sale 2, and superior to Sale 3.  The subject land has direct river frontage similar to Sales 1 and 2, and is smaller than Sale 1, but larger than Sale 2.  The dry area of Lot 5 is 2.2 hectares, with 0.3 hectares dredged for river bank revetment purposes.  If I apply Mr Delgarno’s relationship between Sale 1 and the subject land, to the site value of Sale 1 ($2,000,000) I could conclude a site value for Lot 5 at $1,697,000.  If I then adjust Mr Gay’s costs of developing a working platform for Lot 5 (Exhibit 6), by amending his rate of fill to $15 per cubic metre, I could complete a cost for fill of $480,000 instead of his figure for $800,000.  This would result in an overall cost of development of $1,016,000, and an unimproved value of Lot 5 of $681,000 ($27.24 per square metre).  That is not inconsistent with Mr Delgarno’s determination of $30.50 per square metre;  or $28.00 per square metre if adjusted for the higher added costs of filling.

  2. If I then compare Lot 5 with Sale 2 (Lot 4), I note Mr Gay sees Sale 2 as having a fair unimproved value of $20 per square metre.  But that is inconsistent with the accepted rate for Sale 2 of $43.60 per square metre, and also reflects the added value of the existing buildings at too high a value.  I note also that Sale 1 (Lot 38) has an accepted rate of $30 per square metre, and is a much larger parcel than Sale 2 (Lot 4).  On that evidence I reject Mr Gay’s estimated rate for Sale 2 (Lot 4), and I adopt Mr Delgarno’s adjusted unimproved value for Lot 5 at $28 per square metre for 25,000 m² or $700,000.  To that must be added the value of the seabed lease (Lot 403) at $30,000, giving an overall unimproved value of $730,000. 

  3. ·Lot 9 – Mr Delgarno sees Lot 9 as slightly superior to his Sale 3 (Lot 49) and Sale 4 (Lot 50);  and slightly inferior to Sale 5 (Lot 35).  All of those sales are seen as “dry” lots, but Lot 35 has corner access to formed Waterway Drive and Beattie Road;  while Lot 9 has virtual corner access, but only to an unformed Shipper Drive.  Lot 49 is an inside lot.  However the subject land (Lot 9) has two major disabilities not evident in either Lot 35 or Lot 49.  The western end of Lot 9 is subject to a major drainage and ponding easement;  and it is also possibly likely to be subject to future resumption for future arterial road purposes.  The evidence of its future road resumption is strengthened by the areas previously acquired by the Crown on Lot 47 (Lot 57) and Lot 48 (Lot 56) to the south of Lot 9.

  4. On that basis I believe overall that Lot 35 ($22.50 per square metre) is superior to Lot 49 ($20.30 per square metre) which is also superior to Lot 9.  Adopting the approximate relativities of Mr Delgarno, I believe Lot 9 should reflect a rate of about $19 per square metre, or $543,210, say $545,000. 

  5. ·Lot 45 – Mr Delgarno sees Lot 45 as superior to Sale 1 (Lot 38 - $30 per square metre), slightly inferior to Sale 2 (Lot 4 - $43.60 per square metre), and superior to Sale 3 (Lot 49 - $20.30 per square metre) which is a “dry” lot.  On that basis there is nothing to discredit his amended application for Lot 45 at $39 per square metre.  As noted in paragraph [73] Lot 45 is in fact a “waterfront” parcel, but was seen in paragraph [33] by Mr Gay as a “dry” lot.  Based upon that incorrect conclusion by Mr Gay there is no evidence to discredit Mr Delgarno’s determination of Lot 45 at $660,000.

  6. ·Lots 43, 44 and 46 – Mr Delgarno sees these lots overall as inferior to Sale 1 (Lot 38 - $30 per square metre), and Sale 2 (Lot 4 - $43.60 per square metre), but superior to Sale 3 (Lot 49 - $20.30 per square metre).  The subject land is larger than Lot 38 and has a wider river frontage.  If I consider Mr Delgarno’s rate for the small area of Lot 46 at 1,500 m², I note that his rate of $100 per square metre is not challenged, and I will adopt the $150,000 for Lot 46.  In respect of his rate of $27 per square metre for Lots 43 and 44, I note that was seen relative to his analyzed rates for Lot 38 ($33.64 per square metre) and Lot 4 ($44.70 per square metre).  If I then adjust that relativity to the adjusted rates, after allowing the higher rate for filling, I could conclude a rate for Lots 43 and 44 at $24 per square metre, or $1,913,808.  If I then add the agreed seabed lease at $124,000, and Lot 6 at $150,000, I conclude an unimproved value for Lots 43, 44 and 46 at $2,141,138 (say $2,187,808) (say $2,200,000).

  7. ·Lot 47 – If I then adjust Mr Delgarno’s comparisons to allow for the adjusted filling rate of $15 per cubic metre, I could conclude an amended rate for Lot 47 at $70 per square metre.  This is consistent with Sales 1, 2 and 3 all of which are seen as inferior to Lot 47 due to the small size of Lot 47 at 3,352 m².  On that basis Lot 47 would have an unimproved value of $234,640 (say $235,000).  Mr Gay’s estimate of Lot 47 at $16 per square metre is inconsistent with other “wet” lots in that precinct.

Conclusion:

  1. Having considered the whole of the evidence I am partly persuaded that the appellants have proved their case.  The unimproved values as determined by the Chief Executive are set aside, and the following unimproved values are determined in the sums of:

    Seven Hundred and Thirty Thousand Dollars ($730,000) – AV2002/0120;

    Five Hundred and Forty-Five Thousand Dollars ($545,000) – AV2002/0121;

    Two Million, One Hundred and Forty Thousand Dollars ($2,2000,000) – AV2002/0131;

    Six Hundred and Sixty Thousand Dollars ($660,000) – AV2002/0132;

    Two Hundred and Thirty-Five Thousand Dollars ($235,000) – AV2002/0133.

NG DIVETT
MEMBER OF THE LAND COURT

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Maurici v Chief Commissioner of State Revenue [2003] HCA 8
Chen & Zhang v Commissioner for Act Revenue (Administrative Review) [2014] ACAT 70
Commonwealth v Arklay [1952] HCA 76