Radio City Travel Pty Ltd v Chief Executive, Department of Lands
[1996] QLC 7
•16 February 1996
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BRISBANE
16 February 1996
Re: Appeal against valuation
Valuation of Land Act 1944
City of Brisbane.
(AV93-688).
Radio City Travel Pty Ltd
v.
Chief Executive, Department of Lands
D E C I S I O N
Radio City Travel Pty Ltd is the owner of land described as Lot 1 on Registered Plan 209096 and Lot 2 on Registered Plan 70032, Parish of Tingalpa, County of Stanley, containing an area of 21.343 hectares.
Lot 2 on Registered Plan 70032 has the benefit of an easement of approximately 2.2278 hectares over Resubdivision A on Registered Plan 70032, being the land immediately to the south of Lot 2. However, the evidence does not indicate that the easement has any effect upon the unimproved value of the subject land.
By a succession of events which the evidence did not make entirely clear, it appears that some time following the issue of the valuation made as at 31 March 1990, the respondent amalgamated the valuations of the two lots and issued a valuation for the amalgamated parcel which may have been $250,000. Following an objection the valuation was reduced to $175,000.
Despite some confusion during the hearing, the parties have agreed that the valuation in dispute is for $175,000 and the date of valuation is 31 March 1990.
The land is situated on Murarrie Road, Tingalpa, approximately 400 metres north of its junction with Wynnum Road. It is approximately 8 kms east of the Brisbane GPO.
The land is accessible from Murarrie Road which forms the whole of its north-eastern boundary. Murarrie Road is a two-lane bitumen sealed road with gravel shoulders. The land is also accessible in its south-western corner by Vane Street, to which it has a 20-metre frontage. Vane Street is a bitumen sealed two-way local suburban street with concrete kerbing and channelling, which runs off Wynnum Road.
Water, electricity, telephone and garbage collection services are available to the property, but sewerage would not be available as the land is too low-lying.
The land is irregular in shape and is of low elevation, rising gently towards the south-west. The majority of the land is between the 1 and 2 metre contour lines, a small area towards the south-western corner of the property rising above the 4-metre contour line. The property is almost fully cleared and grassed with only small clumps of trees remaining. Bulimba Creek forms the whole of the western boundary of the property.
The subject land is zoned partly "Future Urban" and partly "Special Uses", which is further explained later in this decision. As for the surrounding locality, except for a small area of "Open Space" zoned land to the south-east of the property, there is residential development to the south. To the north is mostly vacant land zoned "Non-Urban" and "Open Space", while on the other side of Bulimba Creek, the land to the north-west is zoned "General Industry", while to the west the land is zoned "Sports and Recreation".
Mr Clem Jones, the director of the appellant company, appeared and gave evidence. Mr Jones explained that Lot 2 on RP 70032 was originally acquired by the Australian Labor Party for the purpose of radio transmission. A transmitter for Radio Station 4KQ was built upon it and Lot 2 on RP 32987 was subsequently acquired for purposes of a second mast. However, it was never used for that purpose. When it became apparent in the early 1980s that the land, then being used as a standard transmitter only, had a limited future for radio transmission purposes, discussions took place with the Council about the prospects of subdividing the land. It was proposed at that time to fill the area and a plan was prepared in consultation with the Brisbane City Council for subdivision of the land which was to be rezoned to "Light Industry" and "Residential A".
Subsequently, the transmitter was transferred to St Helena Island and the broadcasting facility was burnt down.
With the removal of the transmitter, negotiations were entered into with the Brisbane City Council to rezone the land. Initially the Council indicated its willingness to establish a flood regulation line which would provide for industrial and residential development. During the course of these negotiations, Community Station 4RPH needed an emergency transmitting facility and the company agreed to assist it by making its mast available until permanent headquarters were found by the Commonwealth Government.
During this period on at least two occasions, the Council varied the flood regulation line, leaving only a small area in the south-east corner available for any income-earning purpose. The rest of the land in Mr Jones' opinion, was almost worthless. The Council then rezoned the area in the south-west corner to "Future Urban" without reference to the owner. When the owner became aware of the change, which it believed was done to facilitate subdivision, an application was lodged. However, it was found that the cost of infrastructure requirements made the re-zoning totally impossible. In the end, the Council refused the subdivision. A reason for refusal was that part of the land was affected by a flood regulation line which, Mr Jones said, had been brought about by a change of that line by the Council.
Mr Jones went on to say that despite efforts to sell the land, real estate agents could generate no interest in the land whatsoever. However, after about 12 months of negotiation, in June 1995, a contract was signed for the sale of 18 hectares of the land to the Brisbane Polo Club for use as a polo ground. Mr Jones said that this is probably the only use which will not be adversely affected by frequent inundation of the land.
Approximately 3.5 hectares of swamp in the south-east corner is to be retained by the appellant. Mr Jones said it has no value to the Polo Club and none to himself.
Mr Jones does not think that the contract of sale is specifically enforceable as the survey has yet to be completed to the satisfaction of the Council. However, the agreement was on the basis that an all-up figure of $200,000, including principal and interest, was payable by instalments over ten years at approximately 11%, with $5,000 payable in the first three years. Possession was given in June on a deposit of $2,000, so that the Polo Club could level the ground and commence to construct stables.
Mr Jones said the Council would not approve any permanent structure on the land except for the stables which would be used only infrequently for polo matches and would not be permanently occupied.
Mr Jones claimed that the agreement made on such generous terms and conditions indicated a selling price of between $100,000 and $120,000, approximately $5,500 to $6,500 per hectare. This was the only indicator of value that he raised in his evidence.
Mr Jones emphasised that as a result of the Council shifting the flood regulation line to its present position at some time prior to March 1990, the company's plans for subdividing the land into light industrial and residential lots were frustrated. In any case, Mr Jones said that even if it was not for the regulation line, the infrastructure requirements made any proposed subdivision not viable.
When asked about possible grazing use of the land, Mr Jones said that it had been used for many years by a farmer, rent free, on the understanding that he controlled the groundsel and kept the fences in good repair. However, Mr Jones thought that there was no interest in the land for grazing purposes, as real estate agents had tried to market it in all manner of ways, but could find no interest in it whatsoever.
Mr Jones agreed that it might be possible to construct a house on the south-western corner of the property above the flood regulation line. However, this would require Council approval. From earlier experience he was not sure that the Council would approve the construction of a house. If it did, it would require a septic tank, as sewerage would not be available. Drainage presented a problem for any permanent building on the site. Mr Jones said that was the reason the Polo Club could not construct a club house on that area. It had been permitted to build stables because any drainage resulting from their infrequent use would be over the land.
The area of the subject land that is above the flood regulation line is, according to Mr Jones, below the 1974 flood level. The Council's attitude to construction of a house would depend upon the frequency of possible flooding. The Council would probably require an elevated house constructed on stumps. He said that in 1974 the houses in Vane Street and Verdun Street were inundated by flood water.
Evidence for the respondent was given by Mr V Di Salvo, a Senior Valuer employed by the Department of Lands. Mr Di Salvo was not the original valuer, but had taken over the responsibility for this valuation. Mr Di Salvo explained that although the total area of the subject land is 21.343 hectares, approximately 6.3 hectares is zoned "Future Urban", of which approximately 1.2 hectares is above the flood regulation line. He thought that the area could be used as a rural residential site. He went on to say that it would be possible to develop more than one rural residential site if some of the lower elevation land was included in the subdivision.
Of the remaining area of 15 hectares, approximately 5.6 hectares was zoned "Special Uses (Radio Transceiver)" and approximately 9.4 hectares was zoned "Special Uses (Radio Transceiver/Sports and Recreation)".
Mr Di Salvo stated that at the date of valuation the land was used for livestock grazing. He was of the opinion that the valuation was not excessive on the basis of its use as a grazing proposition and that the value of $8,000 per hectare was conservative. However, he did not refer me to any sales to support that level of value.
Mr Di Salvo was of the opinion that the highest and best use of the land was as a rural homesite with the balance area being used for grazing. He thought it would be particularly suitable for a purchaser who wanted to run horses and who could build a high-set house and stables on the area above the flood regulation line.
The area immediately to the south of the higher area of the subject land is developed for residential purposes and the area was flooded in the 1974 flood. Mr Di Salvo said that it was an ordinary sort of residential development, where the values per lot in 1990 would have ranged from approximately $30,000 to $50,000.
However, I was not referred to any evidence of the value of rural residential sites in this area. Mr Di Salvo seemed to be of the opinion that the land had been valued basically as a grazing block, but keeping in mind that it could be used as a rural residential site in conjunction with its use for grazing.
At one stage of his evidence he thought that three residential allotments could be cut from the area above the Flood Regulation Line. However, it is difficult to see how this could occur, particularly having regard to the shape of the land and the attitude of the Council with regard to subdivision of flood-prone areas.
Mr Di Salvo said that he had looked generally at the relativity of values of land used for rural homesites and for grazing, but he provided no details of these other valuations. He admitted that the subject land was a difficult block to value. However, it was his opinion as a valuer that the valuation of $175,000 was conservative, particularly having regard to the fact that in 1995 the Department had applied a valuation of about $15,000 per hectare to low lying flooded land suitable for grazing.
Mr Di Salvo was surprised that the subject land had been difficult to sell. He thought it would be particularly suitable for grazing or for purposes such as those to which the Polo Club proposes to put it. However, he said that he could not refute what Mr Jones had said about the difficulties experienced by real estate agents in selling the property. Despite the Council attitude, he thought that it would be possible to use it for other sporting purposes.
In his cross-examination of Mr Di Salvo, Mr Jones referred to the sale of 42.53 hectares of land situated in Youngs Road, Hemmant, from the Australian Telecommunications Corporation to his own company, Clem Jones Australia Pty Ltd, in December 1994, for $370,000. He suggested that there were between eight and ten hectares of land above the flood regulation line which would be suitable for subdivision, while the balance could be used for grazing.
Mr Di Salvo knew of the sale and knew the land generally, although he had not made a detailed inspection of it. He knew that part of the land was above the flood regulation line and agreed that it was all low and flat and, as he put it, "very ordinary land", although superior to the subject land.
Since he had not analysed the sale, Mr Di Salvo could not agree or disagree with Mr Jones' suggestion that the ten hectares above the flood regulation line, plus the building on the land would be worth $260,000, leaving $110,000 for the 32 hectares of grazing land. That property had been valued by the respondent as at 30 June 1993, at $325,000, but Mr Di Salvo was not in a position to make a comparison between the two properties.
Mr Di Salvo contended that the appellant company was restricted to its grounds of appeal which were that the Council's planning restrictions are such as to make this land valueless. The company had suggested an unimproved value of nil. He submitted that the appellant had failed to discharge the onus of proving its grounds of appeal. For that reason he had not provided detailed sales evidence or relied on relativity to defend the respondent's valuation of $175,000.
On the other hand, Mr Jones submitted that the appellant company had spent substantial sums of money engaging professional people to put forward proposals as to how the subject land could be used. They had also engaged professional people to try to sell the land or to develop it or utilise it in some way to make it produce a return. All these efforts had failed over a ten year period and the company had come to the conclusion that the land was worthless. He said that he was quite sincere in his opinion that nothing could be done with the land until by chance they had found a purchaser. However, at the date of valuation there was no evidence that they were ever going to get a return from the land.
This is an unusual case involving an area of over 50 acres of low-lying land, well situated within easy access to Brisbane, on a major road. Despite the appellant's submissions, it is difficult to see that this land is worthless. Indeed, the fact that the Polo Club was in the process of purchasing most of the land is an indication that it had a use. There is clear evidence that it also had a use for grazing, as a farmer had so used the land for many years.
The difficulty is just what value did the subject land have as at 31 March 1990? Mr Di Salvo for the respondent submitted that it could not have a value of less than $175,000 for grazing purposes, but he has provided no details of sales to support that valuation. On the other hand, Mr Jones submitted that the land cannot have a value of more than $2,500 per hectare on the basis of his analysis of his own purchase of 42 hectares for $370,000 in December 1994.
I have no firm evidence of the sale referred to by Mr Jones. Reference to it only emerged in his cross-examination of Mr Di Salvo. Mr Jones has provided no details of the analysis of the sale. Mr Di Salvo does not know the sale well enough to make any analysis or comparison with the subject land. Therefore, I do not find it helpful in providing a basis for this valuation.
The only two pieces of evidence that are helpful are, first, that the appellant company tried unsuccessfully to market the land for some period of time. The company was desperate to sell the land as it was accumulating debts and, according to Mr Jones, would have accepted any reasonable offer for the land. However, none was forthcoming.
The second piece of evidence which is helpful is the fact that some five years after the date of valuation, 18 hectares of the subject land is in the process of being sold to the Polo Club on favourable terms and conditions for $200,000. This sale is over a ten year period with $5,000 payable in the first three years and the balance over the next seven years. The present value of that sale is therefore considerably less than $200,000. The remaining 3.5 hectares situated in the south-east corner which Mr Jones refers to as a swamp, will remain in the appellant company's ownership.
In the circumstances, I have come to the conclusion that the appellant company has discharged the onus of proof that the valuation of the subject land is excessive. The difficulty remains as to just what the valuation should have been.
There seems to be little doubt that the Council would have agreed to the construction of a high-set house on the area above the flood regulation line. Both Mr Di Salvo and Mr Jones seemed to agree about that. That house site area could not have a valuation which was less than those applied to the residential blocks in Vane Street and Verdun Street to the south. As Mr Di Salvo has said, the balance of the area could be used for grazing or for the running of horses.
Having regard to the whole of the evidence, I have come to the conclusion that the unimproved value of the subject land as at 31 March 1990, was $150,000. Therefore, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the subject land as at 31 March 1990, is determined at One hundred and fifty thousand dollars ($150,000).
President of the Land Court
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