Re Mansfield
[1998] QLC 115
•6 October 1998
LAND COURT
BRISBANE
6 OCTOBER 1998
Re: Appeal against a review decision - Land Act 1994 Application for conversion of tenure - Lease: SL 01/42222, Atherton District
Lessee: Jon D. Mansfield
(Hearing at Atherton)
D E C I S I O N
The Minister for Natural Resources received an application from the lessee for conversion of the tenure of SL 01/42222, on 1 September 1997. Pursuant to s.170(4) of the Land Act 1994 (the Act) the unimproved value of the land is to be assessed as at the date of receipt of the application.
The lessee appealed against the Minister's decision on purchase price (unimproved value). The appeal process commenced by way of an application for internal review. The delegate of the Minister reviewed the original decision and amended the unimproved value down from $50,000 to $47,000. Remaining dissatisfied with that decision, the lessee filed with the Court a written Notice of Appeal.
The Notice of Appeal was not filed within the period specified pursuant to s.428(3) of the Act. Pursuant to sub-s.(5) of s.428 the lessee's reasons for the delay were heard. In the circumstances, counsel for the chief executive had no objection to the period for filing the Notice of Appeal being extended. The period was extended accordingly to the day on which it was received by the registrar.
The Special Lease comprises three adjoining, separately surveyed lots, each zoned "Residential" under the provisions of the Town Planning Scheme for the Council of the Shire of Eacham. The land is situated fronting Dirran Street about 400 metres north of the Millaa Millaa Post Office. It is described as Lots 208, 209 and 210 on Plan M7091, Parish of
Dirran, County of Nares. The area of the lease is 2,828 m with the areas of the individual
| Lot 208 | - | 999 m |
lots being:
Lot 209 - 1,022 m Lot 210 - 807 m
In the Notice of Appeal the lessee contended for an unimproved valuation of $36,000. Mr Mansfield attended the hearing and conducted the appeal. He explained that his estimate had been based on an average price of $12,000 per lot. However, since he had filed the appeal there had been two adjoining lots in Wattle Street, centrally located next to the Post Office, sold for $20,000 or, as he saw it, $10,000 for each lot. At the time of the hearing, the sale had taken place very recently. His inquiries indicated that the sale had settled and the transfer documents had been lodged for registration. This sale indicated to him that his own estimate of the value of the individual subject lots had been too optimistic. Prior to that sale, the most recent sale of a privately owned residential allotment had been in March 1996 for $15,750. In his opinion that sale land was "well situated with highway frontage and views". About three months prior to the hearing, according to Mr Mansfield, a residential lot in Millaa Millaa had been auctioned by the Department of Natural Resources. The reserve price had been $17,000 and Mr Mansfield's bid of $12,000 was the only one received. He held the opinion that sales of Government land created an artificial market because of the reserve price system. He spoke of three other lots of Government land having been put to auction in the previous three years with reserve prices for two having been $19,000 and the third $18,000. The highest bids received at auction for those lots, according to him, were $15,000, $14,500 and $12,500 respectively. Each of the auctioned lots had bitumen street frontage and drainage. Mr Mansfield was aware that the two lots which had reserve prices of $19,000 had eventually sold at those prices, but, according to him, the first sale occurred at least a year after the auction and the second about two years.
Mr Mansfield said that Lots 208 and 209 were subject to natural rainwater run-off directed to a piped culvert in the adjacent road reserve. Apart from the frontage to Lot 210 where there was a bitumen strip and concrete kerbing and channelling, which had been constructed at his cost, Dirran Street was unsealed becoming "boggy and impassable during rainy periods". It was Mr Mansfield's opinion that Millaa Millaa township had become "a dying rural community" after the closure of the cheese factory in the 1970's, then more recently the closure of the sawmill. The attendance at the primary school was dwindling and there had been an exodus of the elderly residents to the larger local centres. He said the local climate was adversely affected by the wet season extending normally from January through to July.
Mr Mansfield's research had disclosed that since January 1996 to the date of the hearing, a total of 17 house sales had been recorded in Millaa Millaa in the price range of $35,000 to $128,000, averaging about $62,500. Prior to the recent unrecorded Wattle Street sale, and since January 1993, there had been only 10 sales of vacant lots, half of which had been offered by Government departments. Of the private sales four had taken place in 1993 and early 1994, one at $14,000, the others in the range of $20,000 to $25,000. In Mr Mansfield's opinion, the market had declined subsequent to 1994.
The Minister's decision on purchase price had been based on a valuation carried out by Mr R.G. Moroney, registered valuer. Mr Moroney described the land as being well drained with "good easy access" and good aspect. Reticulated water, refuse disposal, overhead electricity and telephone connections were stated as being "available in the Township". It was Mr Moroney's verbal evidence that although Lot 210 had a 5-metre wide bitumen seal with concrete kerbing and channelling on the side adjacent to the lot, he had not found any added value due to that construction being in existence.
In his opinion, the highest and best use of the land was provided by its existing subdivision into three residential lots. Although there was now a minimum lot size
requirement of 1,000 m for new subdivision in the "Residential" zone, there was no
impediment to separate titles being issued for each of the subject lots. He had established that the fee applicable to obtain the three separate titles if the land was held in fee simple, would have been $200, at the relevant date.
He valued the land on the freehold separate title assumption, as follows:
Lot 208 - $17,000 Lot 209 - $17,000 Lot 210 - $16,000 $50,000 Less allowance for production of separate titles - $200
Less allowance for multiple holding 5% - $2,500 $2,700 $47,300 Adopt $47,000 His basis of valuation of the separate lots was obtained from the sales of four
allotments in the township, brief details of which are as follows:
1. Young to Reid, 1,012 m "Residential" site, Innisfail Road (Palmerston Highway) sold March 1996 for $15,750 showing an analysed unimproved value of $14,750. In comparison to the subject lots, Mr Moroney described the sale land as - "Comparable lot area with similar available services. Inferior location to the subject lots, fronting a highway and being more distant from shops and other community services. Inferior access. Superior elevated outlook. Overall inferior to each of the subject lots". (This was the sale land described by Mr Mansfield as "well situated with highway frontage and views.")
2. Queensland Government to Kelly, 1047 m "Residential" site, sold April, 1996, $19,000, analysed unimproved value $18,000 - " Slightly larger lot area than each of the subject lots, similar available services, topography and access but slightly inferior location and aspect. Closer to Millaa Millaa State Primary School, overall slightly superior to each of the subject lots.
3. Queensland Government to Wagg, 1062 m "Residential" site, sold January, 1997, $19,000, analysed unimproved value $18,000 - "Slightly larger lot area than each of the subject lots, similar available services, topography and access but slightly inferior location and aspect. Closer to Millaa Millaa State Primary School."
4. Queensland Government to Mills, 1012 m site zoned "Special Purposes", sold March, 1997, $12,500, analysed unimproved value $11,500 - "Similar overall area to each of the subject lots, similar available services and topography, slightly inferior aspect but closer to the Millaa Millaa State Primary School, inferior zoning requiring rezoning to 'Residential' to permit the highest and best use, overall inferior to each of the subject lots". Rezoning costs and applicable contributions were calculated by Mr Moroney to be $3,648.
Mr Moroney had no knowledge of the sale of the two adjoining lots in Wattle Street about which Mr Mansfield gave evidence. If the details were correct and the sale had settled in the amount of $20,000 he would not accept that the price would have represented $10,000 per lot, but a discounted price for the bulk purchase. Not being aware of the circumstances of the sale or the accuracy of the details as provided by Mr Mansfield, Mr Moroney was loath to be drawn into giving a considered opinion as to the level of bulk discount which may have been reflected in the sale although he thought the discount might have been in the range of $1,000 to $2,000 per individual lot.
Mr Moroney did not agree that Millaa Millaa could be typified as a "dying" township. While he gained no assistance from any evidence of value from the schedule of house sales tendered by Mr Mansfield, he suggested that the volume of those sales reflected an active real estate market. He saw the relatively low volume of vacant land sales as indicative of the relatively small number of vacant lots available for sale, rather than any lack of interest. He did not accept that the low bids at auction for the Government lands indicated that the reserve prices were unrealistic. Two of the Government sales from which he obtained his basis of valuation had been, as suggested by Mr Mansfield, sold subsequent to their unsuccessful auction, at the reserve price, but through real estate agents to whom the listings had been given. Mr Moroney's inquiries of agents indicated to him that the reserve prices at which the Government lands had been subsequently listed for sale had been considered competitive. He referred to other comparable privately owned lots being listed at higher prices. Mr Moroney's evidence was that the listed prices of the previously auctioned lots were not necessarily non-negotiable and any offers would have been considered on their merits. There was no likelihood however, that offers in the range of the bids received at auction would have been seen as reasonable.
Conclusions
Mr Mansfield demonstrated a keen interest in local real estate values and had been well
aware of each of the sales in Mr Moroney's basis. However, his opinion as to market value is
clearly influenced by the bids made at auction and the more recent sale of the double
allotment in Wattle Street. Mr Mansfield had spoken to the vendor of that land and had been
advised that the sale proceeds had been received and "banked". He had not thought it
appropriate to seek a copy of the contract. I think, in the circumstances, although the details
of the sale have not been confirmed, it can be accepted for discussion purposes, that at least
the sale had settled. However, even if the details provided are later proved correct, and it is
found that there were no extenuating circumstances surrounding the sale, and that the sale
land could be regarded as directly comparable with the subject lands, one sale in isolation
does not prove that the market value of vacant land in Millaa Millaa had fallen dramatically
below the previously existing levels. Furthermore, it is well held that unaccepted offers to
purchase (as with the Government land), are not proof of value.
On the other hand Mr Moroney has based his valuation on four sales each tending to
support a relatively consistent level of value, if Mr Moroney's comparisons are realistic. It is
true that three of those sales were effected by the Government and, it seems, at least with
two, at the precise reserve price set at a previously unsuccessful auction. That may be
reflective of a vendor unwilling to negotiate in the normal market sense, but the fact is that
even if it took an extended period of time to achieve sales, purchasers were found by local
agents who, on Mr Moroney's evidence, had competitive listings.
Mr Moroney's basis of valuation is therefore persuasive and provides prima facie
support to the level of value which was applied to the individual subject lots. As pointed out
by Mr Mansfield however, each of the sale lots was immediately accessed by a sealed road.
Dirran Street is in fact unsealed, apart from adjacent to Lot 210 which construction, in a
practical sense, is relatively useless while the access off Main Street remains unsealed. I am
not convinced on the evidence that in the comparison process and, bearing in mind Millaa
Millaa is located in a high rainfall area, that sufficient allowance, if any, has been made by
Mr Moroney for the generally unsealed formation of Dirran Street. However, I am not
influenced by Mr Mansfield's description of the street being "boggy and impassable" after
rains. That may be so northerly of the land, but not immediately off Main Street.
As pointed out by Mr Mansfield, Lots 208 and 209 are clearly affected by run-off water
from higher land. That does not mean that Mr Moroney's description of the land as being
"well drained" is wrong or that the physical nature of the allotments was not fully considered.
In the end result I have decided to reduce Mr Moroney's valuation of each lot on an
individual basis, by the relatively nominal amount of $500, due to the unsealed nature of
Dirran Street off Main Street.
| Remaining to be considered is the discount which should be applied to the individual lot values to find the market value of the bulk parcel. | My determination of unimproved value is calculated as follows: | |||||
| ||||||
| ||||||
| ||||||
|
$43,450
Adopt $43,500
Pursuant to s.429(3)(b) of the Land Act 1994, the review decision is set aside and the amount of $43,500 is substituted as the amount of the purchase price.
RE WENCK
MEMBER OF THE LAND COURT
0
0
0