Re Truckelectrics Pty Ltd - [1994] QLC 34

[1994] QLC 34

LAND COURT

BRISBANE
25 JULY 1994
Re:     Determination of Rent
  Second Rental Period
  Special Lease No. 06/45234

Lessee: Truckelectrics Pty Ltd

D E C I S I O N

For the second period of the lease of Special Lease No. 06/45234 which commenced on 1st March, 1993, the Crown is seeking an annual rent of $12,000. The rent for the first period of the lease was $1,162 per annum. Under the provisions of section 204 of the Land Act 1962, the lessee has requested that this matter be heard and determined by the Land Court.
           Special Lease No. 06/45234 is in respect of the land described as Lot 199 on Plan SL 9810, Parish of Woogaroo, with an area of 1.549 hectares. This special lease was granted for a term of 30 years from 1st March, 1983 for Secondary Industry (Carole Park Industrial Estate) purposes. It is situated at 195 Cobalt Street, Carole Park, at the southern end of the Wacol\Carole Park Industrial Estate, approximately 3.25 kilometres from the Carole Park Post Office. Cobalt Street is a full width bitumen sealed roadway of industrial standard and has concrete kerbing and channelling. Electricity, gas, reticulated water and sewerage are available. The land is zoned "Medium Industrial" under the Moreton Shire Council town planning scheme and is used for the business of manufacturing automotive electrical parts.
           In its natural state the land was level with the road frontage but fell fairly steeply away to the rear. Part of the property has been cut and filled and developed with an industrial building and office. However, because of the earthworks required to the natural fall of the land to allow building, the driveway entrance slopes quite steeply from the footpath.
           The rent in this case falls to be determined in accordance with the provisions of section 204(5B)(c) of the Land Act 1962 which reads as follows:
"The Court shall determine the annual rent at such sum as it considers an experienced and bona fide person would be willing to pay as annual rent for the land comprised in the lease during the rental period in question, having regard to the use to which the land may be put in accordance with the purpose for which the lease was granted and under the terms and conditions of the lease."

There is clearly no requirement that the rent should be determined on the basis of a percentage of the unimproved value. However, in this case both parties have agreed that the rent should be determined at 3 per cent of the unimproved value. This Court has on occasions, in the absence of market rental evidence, determined the rent in such manner. Many of the rents in the Carole Park area have been determined on that basis and it is appropriate for the Court to do so in this case. It is therefore necessary to first determine the unimproved value.
Mr Bosko Gojkovic, registered builder, gave evidence that the site is to be developed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Truckelectrics Pty Ltd

Details

AGLC: Re Truckelectrics Pty Ltd [1994] QLC 34
Case: [1994] QLC 34
Decision Date: 25 July 1994

CaseChat Overview and Summary

In the case of Re Truckelectrics Pty Ltd, the Land Court of Brisbane was tasked with determining the rent for the second period of a lease under the Land Act 1962. The lease in question, Special Lease No. 06/45234, pertains to a 1.549-hectare parcel of land located at 195 Cobalt Street, Carole Park, designated for industrial use. The Crown, as the lessor, sought an annual rent of $12,000 for this period, which began on 1 March 1993, while the lessee, Truckelectrics Pty Ltd, had requested a hearing to challenge this figure. The primary legal issue before the court was the appropriate method for determining the unimproved value of the land and subsequently calculating the annual rent based on this valuation.

The court addressed the determination of the unimproved value by considering the evidence from two expert valuers, Mr. Trevor Matthews for the lessee and Mr. Brian Joseph McDonald for the Crown. Both valuers assessed the land's market value by comparing it to several sales of industrial land in the vicinity. Matthews relied on more recent sales to argue that the market for industrial land had declined since 1991 and was at its lowest point in March 1993. In contrast, McDonald used sales from 1990 and 1991 to contend that the market had remained relatively stable. The court found Matthews' evidence more persuasive, concluding that the unimproved value of the subject land should be determined at $26 per square metre, including development works, leading to an unimproved value of $300,000. The court also decided on a development cost allowance of $100,000, which, while not fully aligning with either expert's estimate, was deemed reasonable after considering the entire body of evidence.

Based on these findings, the court applied a 3% rate of the unimproved value to arrive at the annual rent. Consequently, the court determined the rent for Special Lease No. 06/45234 for the second lease period at $9,000 per annum, which was significantly lower than the Crown's proposed $12,000. This decision underscored the importance of considering the prevailing market conditions and the specific characteristics of the land in question when determining lease rents.

Orders