Robinson v Minister for Lands
[1995] QLC 91
•31 August 1995
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BRISBANE
31 August 1995
Re: Determination of Rent - Third Rental Period
Special Lease No 35/36708.
Lessee: Colleen Mary Robinson.
(Hearing at Rockhampton)
D E C I S I O N
For the third period of the lease of Special Lease No 35/36708, Rockhampton District, which commenced on 3 July 1992, the Crown determined the rent at $270 per annum. The rent for the second period of the lease was $50 per annum. The lessee has requested that this matter be referred to the Land Court for hearing and determination and has advised that her estimate of the rent which should be charged is $60 per annum.
Special Lease No 35/36708, Rockhampton District, is in respect of the land described as Lots 175 and 176 on Plan DS252, Parish of San Jose, containing an area of 6.574 hectares. This Special Lease was granted for a term of 30 years from 3 July 1972, for residential or business purposes. The land is located approximately 400 metres north-west of the township of Marmor which is approximately 40 kms south-east of Rockhampton. All weather access is available to within 160 metres of the subject land, then by unformed surveyed road.
Mr HJ Ambrose appeared and gave evidence on behalf of the lessee, while Mr GG Kelsey, Senior Valuer employed by the Department of Lands, appeared and gave evidence on behalf of the Crown.
There was little disagreement between the parties as to the description of the land which consists of sloping softwood scrub country, rising to a steeply sloping, stony, softwood ridge in the centre. There is no natural water and it is watered by two small earth dams which, Mr Ambrose said, last for only one or two months. The scrub on the property has been pulled and grassed and it is used for the purpose of grazing in conjunction with adjoining lands.
Mr Ambrose who knows the land well said that the lessee's concern was that the rental had been assessed on the basis of the value of the land as a rural residential site. He said that it should not be so valued for a number of reasons. First, it would be expensive to establish a building site on the land. Because of the topography, a paved or sealed road would have to be constructed at a cost in excess of $4,000. The only possible building site would have to be levelled and landscaped at a cost in excess of $2,000. There is no permanent water supply. Two tanks for water storage would cost in excess of $3,600. Therefore total costs to establish a house site would be in excess of $12,600.
Second, while Mr Ambrose admitted that it is possible to establish a house site, the major factor preventing residential use is that the land adjoins an operating quarry. The quarry is used for the mining of limestone and a crusher and kiln are situated on the adjoining land. The prevailing winds blow dust containing silica from the crusher, and carbon monoxide and other noxious fumes from the kiln, in the direction of the subject land 75%-80% of the year. The dust and fumes would present a health hazard if a house was constructed on the subject land. In addition, noise from the quarry would be another factor against residential use.
Mr Ambrose said that one of the biggest problems associated with the quarry is from blasting. He explained that when heavy blasts go off, the ground vibrates and, as the subject land is so close, the vibrations would crack any concrete foundations. The blasting often sends stone fragments up to 200 metres from the site, which fall on adjoining properties, including the subject land. Some "rogue" shots throw stone fragments up to 500 metres and occasionally up to 1,000 metres.
Mr Ambrose added that although the mine workings were some 300 metres from the subject land at the relevant date, the quarry was working towards the subject land.
Mr Ambrose said that apart from a house on Lot 66 to the south of the subject land and further away from the workings than the best site on that land, the nearest houses were well to the south of the railway line in the town of Marmor. Therefore, any house constructed on the subject land would be by far the worst affected by the quarry workings, the noise, blasting, dust and fumes.
Mr Kelsey gave evidence that he was not the valuer who originally assessed the rental on the basis that the land could be used for residential purposes. However, that valuer had made substantial allowance for the risks from the blasting and dust problems from the quarry.
Mr Kelsey had considered this approach, but had decided that the best use of the land was as a grazing site without any residential potential. From the sales that were available, he was of the opinion that the site value for grazing was the same as the value assessed by the original valuer as a rural homesite.
Mr Kelsey accepted all that Mr Ambrose said about the dust, the noise and the problems from blasting. Therefore, the only real issue in this case is the value of the land as a small area of grazing land.
In support of the unimproved valuation of $9,000, Mr Kelsey referred to four sales, two of which are of small parcels of land in the Marmor area.
Sale No. 1 is situated in Marmor Road, a formed gravel road somewhat to the north of the subject land. This property of 20.89 hectares, zoned "Rural A", sold in March 1990 for $26,000. The sale analysed to an unimproved value of $21,700. Mr Kelsey describes this land as cleared scrub with easy to moderate slope, steep at the rear and watered by a small dam. He states that it is considerably superior to the subject land, which has inferior access, part being unformed, a difficult internal access because of the slope, inferior location because it is beside the limestone quarry, and is smaller.
Sale No 2, of 8.488 hectares is zoned "Rural A" and sold in October 1992 for $25,000. This sale analysed to an unimproved value of $19,800.
This land is situated on the Bruce Highway slightly to the west of Marmor and is located between the highway and the railway line. Mr Kelsey describes the land as being cleared brigalow scrub with an easy slope, broken by a creek. It is watered by a well and a small dam. He states that this sale is considered to be superior to the subject land which has, as described above, inferior access, inferior internal access and situated beside the quarry. Mr Kelsey goes on to say that the subject and sale properties both have noise problems, the sale has superior water supply and the subject is slightly smaller.
In comparing his sales with the subject land, Mr Kelsey states that his difficulty was knowing how much to discount the sales, which can be used for rural residential purposes, with the subject land, the highest and best use of which is grazing, because of the risks associated with the adjacent quarry. Although it has a good view, he felt that this was outweighed by the risks. He said that in his opinion the unimproved value of $9,000 is conservative.
Realising that this top down comparison needed further support, Mr Kelsey introduced two sales of purely grazing land situated some distance from the Marmor area. He said: "So the only way I could look at a grazing-only situation was to look at properties that were flooded and therefore had no right to build. There are no sales that I was aware of in the shire that I could draw upon. Therefore, I looked at one sale located in the Livingstone Shire at Emu Park, being Sale No. 3 and a larger sale located on Nine Mile Road, Rockhampton, being Sale No. 4."
Sale No. 3 has an area of 5.666 hectares and sold in April 1994 in an unimproved state for $14,000. It is described by Mr Kelsey as level, low-lying ti-tree flats subject to flooding, with a superior location being handy to Emu Park, where there was a reasonable demand for horse paddocks. It is subject to water runoff and relatively frequent flooding whereas the subject land is completely flood free. It is also slightly smaller.
Sale No. 4 has an area of 15.72 hectares and sold in October 1992 for $35,000. The sale analysed to an unimproved value of $25,700. It is described as easy sloping flooded forest flats. Mr Kelsey said the land is larger than the subject land and is better located, being handy to Rockhampton. Although it is subject to relatively frequent flooding, it sold for $35,000 and analysed to $25,700 improved. He notes that the date of sale is reasonably close to the relevant date.
In commenting on Mr Kelsey's basis, Mr Ambrose said that he knew both Sale No. 1 and Sale No. 2, and generally agreed with Mr Kelsey's assessment of them. He said that although the subject land was a "beautiful grazing block, in conjunction with other land", he felt that there would be minimal demand for it on its own as it was too small. He agreed that it was better country than Sale No. 2, but said that the sale has permanent water, as a spring on the land had watered it through the drought last year. He said that the purchaser needed a block of land and knew that he had paid too much for it.
Mr Ambrose did not know Mr Kelsey's sales Nos. 3 and 4. However, during his cross-examination, it was established that Sale No. 3 was purchased by an "almost adjoining" owner while Sale No. 4 was purchased by a person who had land in the area. He made the point that these properties would have more value to such purchasers than to outsiders.
I am of the opinion that the evidence has established that the subject land is simply not suitable as a rural residential site. Therefore, its highest and best use is as a small parcel of good grazing land and its annual rent should be determined accordingly.
In this case, the annual rent is to be determined as at 3 July 1992. The lessee is dissatisfied with the rent determined by the Department and has requested that the matter be referred to the Land Court for hearing and determination. The relevant provisions are contained in s.204 (5B)(c) of the Land Act 1962, which states:"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. "
Mr Kelsey has adopted 3% of the unimproved value of the land, which he considers to be an appropriate method for determining the fair rent for the grazing property. He described it as a reasonable approach and a conservative rental. He was unable to assist with evidence of market rents in the area.
In the absence of evidence for market rents, this Court has on occasion adopted 3% of the unimproved value for the purpose of determining the annual rent for a Special Lease. The method was not challenged by Mr Ambrose, nor was an alternative approach suggested. Therefore, in the absence of any argument to the contrary, I intend to adopt 3% of the unimproved value in this case.
While Mr Kelsey is of the opinion that $9,000 is a conservative valuation for this small area of good grazing land close to the town of Marmor, I am concerned that the assessment by the original valuer did include some element of value for rural residential purposes. Indeed, although Mr Kelsey said that he has considered the value of the land on the basis of its highest and best use for grazing purposes, his cross-examination of Mr Ambrose was largely concerned with its rural residential potential.
I am therefore not convinced that the valuation of $9,000 completely excludes the element of use for rural residential purposes. Sales Nos. 1 and 2 include this element, but Mr Kelsey feels that he has discounted them sufficiently in the valuation that is applied. Sales Nos. 3 and 4, although having no rural residential value, are situated in areas which are so favourably located that they do not make useful comparisons with the subject land.
I therefore intend to give the lessee the benefit of the doubts that I have and make a further reduction in the valuation to eliminate any possibility of rural residential potential. I think that a valuation of $7,500 would be appropriate in these circumstances. Three percent (3%) of this valuation amounts to $225.
Accordingly, the rent for Special Lease No 35/36708, Rockhampton District, for the third rental period is determined at Two hundred and twenty-five dollars ($225) per annum.
(JJ Trickett)
Member of the Land Court
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